H&M looks to e-commerce, announces store closures
“We are very happy to be able to make H&M even more accessible in mainland China,” said Karl-Johan Persson, CEO of the H&M group.
“Tmall is an important complement to our existing physical and digital stores. We see great potential for substantial future growth and Tmall will be an important part of this.”
After opening its first store in mainland China 10 years ago H&M group revenues in China now amount to SEK 11 billion (approximately USD 1.3 billion) in over 500 physical stores and online.
H&M said subsidiary brand Monki has had strong development in China since its launch on Tmall and the collaboration between the two groups is now being extended to include both the H&M brand and H&M Home.
There are also far advanced discussions regarding the launch of the remaining brands in the H&M group on Tmall.
“As one of the world’s most innovative fashion companies, H&M is a perfect fit for Alibaba’s Tmall platform,” said Michael Evans, president of Alibaba Group.
“We are honoured to expand our cooperation with H&M and host their flagship store, enabling H&M brands to engage with our half a billion consumers.”
However it’s not been all positive news for H&M recently, after the fast fashion giant saw sales slow over the last three months, sending its shares down 13 per cent to its lowest level since 2009.
In the fourth quarter of 2017, sales excluding VAT amounted to SEK 50,390m (52,720), a decrease of 4 percent compared to the corresponding quarter last year. In local currencies, sales decreased by 2 percent.
Persson said although the group continued to grow during the year, “growth was dampened by the fact that the sales development in the fourth quarter was significantly below the company’s own expectations.”
“The H&M brand’s online sales and sales of the group’s other brands continued to develop well,” he said.
“Meanwhile, 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.
“In order to respond even quicker to customers’ fast-changing behaviour the company’s ongoing transformation journey is being accelerated. Among other things, this includes continued integration of the physical and digital stores, and intensifying the optimisation of the H&M brand’s store portfolio – leading to more store closures and fewer openings.”
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