Fast-fashion retailer H&M has admitted its operational margins are likely to be less than the 10% forecast, with profit dropping 26% in the third quarter.
The Swedish brand has faced competition from rival Zara for many years, with this compounded by the success of lower-cost marketplaces such as Shein and Temu.
Furthermore, H&M has cited material costs, poor weather and the closure of its digital fashion outlet Afound for the squeeze on its profits.
Looking forward, the retailer stressed its autumn collection, launched during London Fashion Week with pop star Charli XCX, had so far been very well received, and it expects September sales to rise by 11%.
A company profile in the Europe Top1000 360° report recently looked at H&M’s strategy to make its brand a top priority with a focus on the customer experience and product range.
“Our customers are gaining access to a broader and more relevant assortment in stores and online thanks to our investments in areas such as tech and AI, which support our continued work on greater precision and shorter response times,” it said.
“Simultaneously, we are continuing to integrate the two channels for a convenient customer experience with better product availability.”
H&M sells to customers through more than 3,800 stores in 77 markets, as well as online in 60 markets. It also sells on a range of marketplaces and has a social media presence on five platforms – Instagram, TikTok, YouTube, Pinterest and Facebook.
Furthermore, H&M produces an annual Sustainability report where it maps its journey towards a science-based target of reducing its greenhouse gas emissions by 56% by 2030, compared to its performance in 2019. In 2023, it reported reductions of 22%.
The brand has joined The Fashion Pact’s Future Supplier Initiative, offering collective finance to support decarbonisation for clothing and textile factories.
Read the full company profile in the RetailX Europe Top1000 360° report.
This report covers the 30 member countries of the European Economic Area plus the UK and Switzerland.In the RetailX Europe Top100 360° we share valuable insights into what makes this a compelling market for retailers, brands and marketplaces, and what works for the leading retailers that do well here. We explore how customer expectations vary by region and by country, with a focus on key ecommerce markets within Europe.
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research, click here to subscribe to the FREE newsletter sent straight to your inbox and why not follow us on LinkedIn to receive the latest updates on our research and analysis.
