H & M closes stores after poor results

H&MH&M.Photo: wikimedia.org

The H & M Group must close more stores, invest less on new openings, and focus more on online sales due to poor results.

 

The stock prices of the Swedish clothing chain fell 13% on the Stockholm Stock Exchange in the morning trading on Friday. The Group had posted a quarterly result that was far weaker than management expected.

H & M sold goods for NOK 50.4 billion in the fourth quarter, compared with NOK 52.7 billion in the corresponding period last year.

Development went well on the internet for all brands, but in the physical H & M stores, sales are slower, the group pointed out. It’s all about people generally shopping more online, and that there is an imbalance in the composition of the product range for parts of the H & M brand, it stated in a press release.

‘In order to meet customers’ changing behaviour even faster, we are making rapid progress in the company’s ongoing improvement efforts’, H & M wrote.

Curiously, the ‘improvement efforts’ will involve several shop closures, and fewer new stores.

Analysts were expecting a 2% increase in the fourth quarter, showed a question round up put out by Reuters.

Analysts have long been critical of H & M’s failure to better adapt to customers’ changed habits and needs. Even though the Group’s online sales are growing, analysts do not consider this sufficient to compensate for the falling sales in the stores.

 

© NTB Scanpix / Norway Today

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