H&M announced that they will open fewer stores this year because the group intends to concentrate investment on its online operations.
Karl-Johan Persson, Fashion retailer H&M CEO, said “we are continuing to integrate their physical and digital channels to make shopping experience easy and convenient for their customers. This and other extensive investments are driving costs in the short term. Our new online platform and our new logistics systems have not yet achieved full efficiency, but for customers have resulted in improvements such as faster and more flexible deliveries and a more seamless shopping experience.”
Their online sales posted an increase of 27% during the first half in SEK and 20 per cent in local currencies. This is the reason why chunk of its investment will be concentrated on online. From the previously announced target of 175 stores, the company will only open a net of 130 stores worldwide. The transformation definitely is having an effect and will continue at a fast pace within their strategic focus areas.
The continued increase in full-price sales, reduce markdowns and increase market share is a clear sign that customers appreciate their collections and the improvements they are making to the product assortment and the customer experience.
Persson added, “Sales developed well in most markets. We had the strongest growth in countries such as the US where we grew sales by 17 per cent, in Mexico by 25 per cent, in India by 39 per cent, in Russia by 19 per cent and in Poland by 11 per cent in local currencies. We also grew in the UK and Sweden where we took market share despite challenging market conditions.”
H&M group shared that they gained almost an 11% increase in net sales in the first half to SEK108.5 billion and a net profit of SEK5.37 billion, down from last year’s SEK6.01 billion.
Part of their strategic transformation is to expand their partnership with global payments provider Klarna to enable frictionless checkout across all its channels and elevate the shopping experience of its customers. Frictionless shopping experience is expected to go live with H&M in the United Kingdom, the US, Sweden, the Netherlands, Austria, Finland, Denmark and Switzerland this year. Six other countries will be added by 2020.
They will further integrate H&M’s digital and physical stores to give customers a seamless, personalised and engaging shopping experience no matter where, when and how they shop.
Source: Inside Retail
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