Swedish clothing giant H&M on Friday said sales fell below expectations in the fourth quarter and it would close more stores as customers increasingly prefer to shop online.
H&M CEO Karl-Johan Persson said in a statement that the company's “online sales and sales of the group's other brands continued to develop well” but that physical stores “were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry”.
Sales between September and November dropped by four percent compared to the same period last year to 50.4 million kronor ($5.9 million). In local currencies, sales fell by two percent. However in the financial year of 2017 sales grew by four percent.
On Friday morning, the company's share price plunged by 15 percent in the Stockholm Stock Exchange.
“In order to respond even quicker to customers' fast-changing behaviour the company's ongoing transformation journey is being accelerated,” Persson said.
“This includes continued integration of the physical and digital stores, and intensifying the optimization of the H&M brand's store portfolio – leading to more store closures and fewer openings,” he added.
The group did not specify exactly how many stores would be closed and where.
H&M had announced earlier this year that it would open physical stores around the world to compensate for the downturn due to fierce competition from online sales platforms.
H&M group, which owns other popular brands such as COS, Monki and Weekday, has 4,553 physical stores around the world as of August 31st.