H&M slowing store growth to focus on e-commerce; debuting discount format
Hennes & Mauritz is pulling the breaks on store expansion as it looks to grow its online business, which has lagged behind many of its rivals. The fast-fashion giant will open about 390 new stores in 2018, and close about 170, for a net addition of 220. In 2017, it had a net addition of 388 stores.
But even as its slows expansion, H&M will debut a budget brand, “Afound,” later this year, with a store in Stockholm and an online site. It will sell products from external brands as well as its own labels.
The company revealed its plans as it reported its biggest profit drop in six years — with a decline of 13% over the 12 months to November 2017. (Profit in the fourth quarter, which ended Nov. 30, fell 32%; sales fell 4.2%). H&M said it expects sales between Dec. 1 and Jan. 31 to increase by 1% in local currencies, after a fall of 2% in the September to November quarter.
H&M said it is investing in analytics and technology to make its supply chain faster and more flexible. The company’s chief global rival, Inditex’s Zara, is renowned for its supply chain prowess.
“The industry changes are challenging everyone and this will continue in 2018,” stated H&M CEO Karl-Johan Persson, who is the grandson of company founder Erling Persson.
But even as its slows expansion, H&M will debut a budget brand, “Afound,” later this year, with a store in Stockholm and an online site. It will sell products from external brands as well as its own labels.
The company revealed its plans as it reported its biggest profit drop in six years — with a decline of 13% over the 12 months to November 2017. (Profit in the fourth quarter, which ended Nov. 30, fell 32%; sales fell 4.2%). H&M said it expects sales between Dec. 1 and Jan. 31 to increase by 1% in local currencies, after a fall of 2% in the September to November quarter.
H&M said it is investing in analytics and technology to make its supply chain faster and more flexible. The company’s chief global rival, Inditex’s Zara, is renowned for its supply chain prowess.
“The industry changes are challenging everyone and this will continue in 2018,” stated H&M CEO Karl-Johan Persson, who is the grandson of company founder Erling Persson.