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IREU Merchandising Report 2019

IREU Merchandising Report 2019

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H&M reports online growth as it further integrates ecommerce and stores

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H&M has reported a 22% lift in online sales in its latest full-year figures, after twelve months in which the fashion retailer moved to futureproof its business and to further integrate store and online sales across its markets.

 

The Swedish fashion retailer, ranked Top50 in IRUK Top500 research, today reported a 5% increase in net sales to £18bn (SEK 210.4bn) in its latest financial year, to November 30 2018. Gross profits came in at £9.3bn (SEK 110.9bn), up by 2.5% from £9.2bn (SEK 108.1bn) at the same time last year. Online sales came in at SEK 30bn (£2.5bn) in the full-year. That’s 22% up on the previous year. Ecommerce accounted for 14.5% of total group sales.

 

In the fourth quarter alone, net sales were 12% ahead of the same time last year, while online sales were 24% ahead of last time in Swedish krona, and by 20% in local currencies. All of H&M’s 47 online markets are now on the same platform, following the migration of its German website. H&M will launch ecommerce in Mexico during the coming year, and, through a franchisee, in Egypt.

 

The company said that its fourth-quarter sales growth had been driven by more full-price sales and lower levels of discounting. At the same time it has focused on creating the best customer offering, on a stable and scalable tech foundation, while growing both through new stores and online. In 2019, the retail group aims to add a net 175 new stores across a variety of its brands, while continuing to invest in a more convenient shopping experience – adding services such as click and collect and the ability to return items bought online to the store. That customer experience was underpinned in the fourth quarter with the opening of three new fulfilment centres with a total logistics area of around 230,000 sq m to increase capacity, especially for online sales. The new infrastructure allows the retailer to deliver more quickly and to offer a wider assortment.

 

In the UK, it said, online sales grew by 38% while sales in stores fell by 1%. That meant overall growth of 8%. In countries including China (+24%), India (+43%), and Russia (+27%) sales grew both in physical stores and online.

 

Chief executive Karl-John Persson said: “It has been a challenging year for H&M group and the industry, but after a difficult first-half there are signs the company’s transformation efforts are beginning to take effect. Improved collections generated better full-price sales and lower markdowns towards the end of the year. This gave us confidence to accelerate our transformation plans in the fourth quarter, with a particular focus on the upgrade of our logistics systems. Inevitably resulting in increased costs, but will lead to a range of improvements for customers.”

 

The company added, in its full-year statement: “Changing consumer behaviour and technological innovation will continue to transform how and when people shop. We are building a business with the flexibility to respond to this constant evolution. We have further to go, and there will continue to be challenges ahead, but the progress we have made across our transformation priorities reinforces the strength of our strategy and gives us confidence to move ahead at full speed.”

 

 

Image: InternetRetailing Media/Paul Skeldon

 

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