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H&M profits leap as online push continues

Swedish fashion giant H&M announced a 20 percent leap year-on-year in third quarter profits but disappointed investors with a slight fall in gross profit margins linked to increased expansion costs.

H&M profits leap as online push continues
The group's net profits reached 5.3 billion kronor ($735 million) — less than analysts had expected following strong sales figures for July and August.
   
September sales were down so far due to "unusually warm weather in most markets", the group said in a statement, adding that gross profit margins had fallen from 58.8 percent to 58.3 percent.
   
Turnover grew by 22 percent to 45.4 billion kronor ($6.3 billion), driven by the rapid expansion of the group which has diversified its brands, reporting "continued strong sales development" for COS, & Other Stories, Monki, Weekday, Cheap Monday and H&M Home.
   
"We have continued to gain market share thanks to strong sales development for all our brands. We see this as proof of well-received collections," H&M chief executive Karl-Johan Persson said in a statement.
   
He added that the group, which currently has 3,300 stores, was on schedule to add another 375 during 2014, opening in the Philippines in October and expanding to South Africa, Peru, Taiwan and Macau in 2015.
   
A planned expansion to India in autumn 2014 was postponed until next year.
   
The group also continued an online expansion with Internet sales launches in France in March, Italy and Spain in August and China in September.
   
"Our online openings have taken place at a rapid pace this year…. We have had a very good response from customers in all these countries," said Persson, adding that the company planned to open eight to 10 new online markets next year.
  
H&M share fell by 3.51 percent on the Stockholm Stock Exchange in late morning trading in an overall market down 0.13 percent.

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H&M

H&M competitor to sponsor Sweden’s Olympic team

Six months after establishing itself in Stockholm, Japanese clothing brand Uniqlo has announced it will sponsor Sweden’s athletes at the 2020 Olympics.

H&M competitor to sponsor Sweden's Olympic team
Anna Hasselborg of Sweden's curling team tries out new kit supplied for the country's athletes by Uniqlo. Photo: Henrik Montgomery/TT

The clothing chain, one of the world’s fastest-growing retail companies, is also set to open more stores in the Scandinavian country.

“Swedes are so sophisticated and warm-hearted,” Uniqlo Europe CEO Taku Morikawa said, stressing how welcome his company has been made to feel.

Morikawa was in Sweden to present the partnership between Uniqlo and the Swedish Olympic Committee at an event at Uniqlo’s store on Hamngatan in Stockholm.

Sweden’s athletes wore teamwear supplied by H&M at the last two Olympic Games.

The Stockholm store, Uniqlo’s first in the Nordic region, opened its doors in August 2018. An expansion is now planned on the Swedish market, although Morikawa declined to reveal where.

“We definitely have plans to open more stores here,” he said.

A store will also open in Danish capital Copenhagen in the coming spring as Uniqlo’s holding company Fast Retailing continues its global expansion.

Sales figures in Sweden’s clothing retail sector have seen a downward trend in recent years, with an exception in 2015.

H&M is usually cited as one of Uniqlo’s main competitors.

The impact of a new player on an already-competitive market is difficult to predict, according to the Swedish Trade Federation (Svensk Handel).

“Locally, competition is sharpened, but competition is already fierce. I would be inclined to say that this type of partly new concept store can, instead, help to revitalise the physical retail sector for clothing,” the association’s head economist Johan Davidson said.  

READ ALSO: H&M profit down sharply despite rise in online sales

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