H&M’s January sales rose by eight per cent. It is targeting an annual local-currency sales growth of 10 to 15 per cent and expects to be within that range from this year on. The Swedish fashion retailer the world’s second-biggest clothing firm after Inditex, saw slow sales growth and a dip in profits last year, is branching out into more brands to reach more customers and investing heavily to speed up supply and improve its online range in response to tougher competition in its budget segment and from online-only players.
H&M had 4,380 stores as of end of January, up 11 per cent from a year ago. The company recently replaced a long-standing 10 to 15 per cent annual store growth target with a turnover target to reflect growing e-commerce.
The company plans to add e-commerce in 11 markets and open 425 net new stores this financial year. In 2017, H&M intends to open stores in four to five new markets, including Colombia, Iceland and Kazakhstan. Europe’s fashion retailers have been suffering lately from an unseasonably warm end to summer and a lack of compelling fashion trends. Business conditions are close to a recession. Price competition in the industry is escalating.