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H&M continues focus on multichannel customer experience as it expands in developing markets and cuts its store presence in markets including Europe

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H&M continues focus on multichannel customer experience as it expands in developing markets and cuts its store presence in markets including Europe

H&M Group this week said its work to integrate its online business into its physical stores continues as the retail group focuses on growth markets for cross-channel expansion in 2020. More than 100 shops in mature markets including Europe are expected to close at the same time.

 

The group plans to open about 200 new shops across its retail brands in developing markets over the coming year, while closing about 175 in markets including Europe, the US and China. It also plans to start selling online in Australia in the second half of the year, and has signed up to join South Korean ecommerce platform SSG in this year. The first H&M store is expected to open in Panama, in partnership with a franchise partner, at the end of this year.

 

The update came as the retail group, which operates retail brands including H&M, Cos, Weekday and Monki, reported net sales of SEK 232,755m in the year to November 30 2019 and pre-tax profits of SEK 17,391m. Both were up by 11% on the previous year. Growth came both in-store and online, with online sales up by 24% in Swedish krona.

 

In the fourth quarter, net sales increased by 9% to SEK 61,694m, compared to the same period last year, and pre-tax profits by 24% to SEK 5,403m.

 

Karl-Johan Persson, chief executive of H&M Group, said: “The H&M group’s transformation work continues to bear fruit. Increased full-price sales and decreased markdowns contributed to an improvement in profit for the full year and in the fourth quarter, when we achieved a 25 percent increase in operating profit while maintaining a high level of activity in our transformation work. It is clear from our well-received collections and increased market share that customers appreciate the initiatives we have taken. The composition and level of the stock-in-trade continue to improve, and we expect a decrease in markdowns again in the first quarter – for the sixth successive quarter.”

 

He said the retailer was seeing the benefit of investment in its supply chain, digitalisation, and in advanced analytics, AI and more widely in its tech infrastructure, through robust scalable platforms that will provide a foundation for new customer apps and technologies.

 

He added: “Our highest priority is to ensure the best customer offering for all our brands and we will continue to invest going forward in order to offer the best combination of fashion, quality, price and sustainability. The customer experience in store and online is constantly being improved and we are also testing various new services to help our customers achieve a sustainable lifestyle. Our digital and physical channels are becoming increasingly integrated and to ensure a relevant presence in each market we are accelerating our optimisation of the store portfolio, including renegotiations, closures and rebuilds. For 2020 we plan to open around 200 new stores, while around 175 stores will be closed. Most of the store openings will be in South America, Russia, Eastern Europe and Asia (excluding China), while the closures will take place mainly in Europe, the US and China.”

 

H&M’s strategic focus on its customer offering will include faster and more flexible payment and delivery options, while it continues to bring online further into its stores.

 

In May, H&M chairman Stefan Persson will step down, to be replaced by current chief executive Karl-Johan Persson. The new chief executive will be Helena Helmersson.

 

H&M is an Elite retailer in IRUK Top500 research.

 

 

Image courtesy of H&M

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