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HM to Shut Stores as Quarterly Results Plunge

Publication Date: 15 Dec 2017 - By Market Mogul By Market Mogul
Actionable
Differentiated

Equity Fundamental Equity EU ex-UK Consumer

Fashion retailer H&M announced today that it will be shutting down more stores after it experienced its biggest drop in quarterly sales in at least a decade.

Although group sales rose by 4% over the year, fourth quarter sales shrank by 4% year-on-year, to 50.4bn kronor ($6bn), as fewer customers visited its stores. This was far below the retailer’s expectations. Shares in H&M have now hit their lowest level in eight years.

H&M plans to adapt to changes in the market by closing more stores and selling the brand through Chinese online platform Tmall. It aims to integrate its physical and digital stores more, and will give more details on their strategy changes at a meeting with investors on February 14.

The company said:

“The quarter was weak for the H&M brand’s physical stores, which were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry[…] In addition, there have been imbalances in parts of the H&M brand’s assortment composition.”

The company’s rival, Inditex, the owner of high street brand Zara, as well as Massimo Dutti, Bershka and Pull&Bear, has continually outperformed H&M, as it expands more into e-commerce. However, this week, the Spanish giant also reported a slowdown in sales in its third quarter but said sales improved again in November given the colder weather.

The post H&M to Shut Stores as Quarterly Results Plunge appeared first on The Market Mogul.

 

 

 

 

Disclosure:

I have no positions in any of the securities referenced in the contribution

I do not use any non-public, material information in this contribution

To the best of my knowledge, the views expressed in this contribution comply with UK law

I agree with the terms and conditions of ReachX

This contribution is for informational purpose and does not constitute investment advice nor is it an offer to sell or buy, nor is it a recommendation for any security.

Market Mogul

 

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