Swedish fashion group H&M warns that 2018 could be yet another difficult year for the company. It is working to improve online sales, but store turnover will most likely continue to drop.
“Transparency”
H&M has experienced rapid growth for years, but its turnover slumped in last year’s fourth quarter, which hadn’t happened in a long time. The Swedish group attributed that drop to fewer customers in its stores and a weak online strategy, which resulted in an online disadvantage.
It wants to remedy that situation this year, but it does warn for continued issues in its store network at its very first investor day, where it divulged the company’s plans. Previously, H&M was very reluctant to do so, but the recent troubles made it realize it had to become more transparent. Chairman Stefan Persson told investors: “especially since we have had a challenging year where we have underperformed both against our own plans and of course market expectations.”
25% online growth
The Swedish not only revealed good news, as that became clear from the investors’ reaction. “Some had hoped the company would manage like-for-like turnover growth in 2018 at least, but that will not even be possible”, one of the investors said.
H&M forecast a 25 % growth in online sales and overall growth for brands like COS and H&M Home, but store turnover for its prime chains, including H&M itself, will continue to drop in 2018.
