Spanish fashion brand Mango has announced it won’t raise prices in the US market despite new tariffs on Chinese imports. This decision stands out at a time when most retailers would typically pass increased costs along to consumers. With the US ranking as Mango’s fifth-largest market and roughly 30% of its American inventory coming from China, this strategy raises interesting questions about how the company plans to maintain profitability while keeping prices stable.
Swimming Against the Current of Trade Tensions
Mango’s CEO Toni Ruiz didn’t mince words about the company’s approach. “We will see how it progresses and we will adapt,” he stated in a recent interview at Mango’s Barcelona headquarters. Unlike competitors who might quickly adjust price tags upward, Mango is betting that maintaining affordable prices will strengthen customer loyalty and potentially grab market share from rivals who choose to raise prices.
This decision comes just as the Trump administration’s additional 10% tariffs on Chinese goods took effect on March 4, 2025. These new trade barriers were implemented after claims that China hadn’t adequately addressed fentanyl trafficking concerns. For fashion brands deeply connected to Chinese manufacturing, these tariffs represent yet another challenge in an already competitive retail landscape.
The Fast Fashion Bind
Anyone familiar with fast fashion knows quick turnarounds and affordable prices are the industry’s lifeblood. Like many competitors, Mango has built its business model around China’s manufacturing expertise, efficient production capabilities, and relatively low costs. With nearly a third of Mango’s US products coming from Chinese factories, these tariffs hit the heart of its business model.
While Mango does produce items in other countries, with Turkey and India serving as its second and third largest production centers, shifting manufacturing away from China isn’t something that happens overnight. Years of established relationships, quality control systems, and logistics networks make any quick pivot both challenging and potentially costly. This reality makes Mango’s “no price increase” stance all the more remarkable.
America in Mango’s Crosshairs
There’s a method to Mango’s apparent madness. The US market currently ranks fifth in Mango’s global portfolio, but the company isn’t satisfied with that position. Ruiz has clarified that he sees “enormous” growth potential in America and hopes to elevate it to one of Mango’s top three markets.
Aggressive expansion plans back this ambition. After re-establishing its US presence in 2022 with a flagship New York store, Mango is now rolling out more than 60 additional locations across the country between 2024 and 2025. With this kind of investment underway, maintaining competitive pricing becomes even more crucial – even if it means temporarily accepting slimmer profit margins.
How Mango Plans to Make This Work
While Mango isn’t raising prices on existing products, their strategy has a catch. Rather than implementing across-the-board increases, the company aims to introduce more premium, higher-quality items specifically for the American market. These higher-priced pieces would naturally come with better profit margins, potentially offsetting the reduced profits on tariff-affected items.
This approach aligns with Mango’s existing positioning as a more upscale fast-fashion retailer. Dresses currently range from $49.99 to $359.99. By expanding its higher-end offerings, Mango hopes to maintain overall profitability without alienating price-conscious customers.
Jeanel Alvarado, Founder & CEO of Retailboss, a retail strategy firm says:
Fast fashion lives on impulse buys, right? If you’re the only one not slapping on a ‘tariff surcharge,’ you win the checkout line. And those pricier pieces they’re sneaking in? Brilliant. They’re padding margins without screaming ‘we got expensive.’ However, it’s a delicate balancing act. Adding pricier items requires careful market research to ensure American shoppers will bite. If not executed thoughtfully, this strategy could muddy Mango’s brand identity.
Fashion Industry Feeling the Tariff Squeeze
Mango isn’t alone in facing these challenges. The entire fashion industry is grappling with the compounding effect of these new 10% tariffs on top of existing 25% duties carried over from previous administrations. The pressure extends beyond traditional retailers to e-commerce giants like Shein and Temu, which have built business models around ultra-low prices and direct shipping from China.
Meanwhile, other retailers are taking different approaches. Target CEO Brian Cornell has warned that consumers will likely see higher produce prices due to Trump’s tariffs on Mexican imports in the coming days. This strategy contrast shows how different retail segments are responding to similar trade pressures.
Can Mango’s Numbers Add Up?
Mango’s recent financial performance gives some credibility to its tariff-absorbing strategy. The company reported an 8% sales increase in 2024, reaching 3.33 billion euros ($3.62 billion), while net profit jumped by 27% to 219 million euros. With a target of 4 billion euros in sales by 2026, Mango appears to be operating from a position of financial strength that allows for some strategic flexibility.
But how long can this approach last? If US-China trade tensions worsen, Mango may eventually face more challenging choices.
While CEO Ruiz indicated there are currently “no plans to produce in the country itself (the US)”, he also acknowledged they’ll “see how things evolve” – leaving the door open for potential supply chain adjustments if necessary.
This adaptability seems baked into Mango’s corporate DNA. “It is a constant in our business to be constantly reflecting on sourcing, supply issues,” noted Ruiz, highlighting the company’s willingness to pivot as conditions change.
Playing the Long Game in American Fashion
Mango’s decision to absorb tariff costs rather than raise prices shows they’re willing to sacrifice some short-term profits for long-term market position. By keeping prices stable while competitors might be forced to increase theirs, Mango is making a calculated bet on building customer loyalty during a challenging economic period.
This means that Mango’s clothing should remain affordable for shoppers despite broader inflationary pressures. It offers an interesting case study for the fashion industry’s response to trade challenges through strategic thinking rather than knee-jerk price hikes.
