Hennes & Mauritz (H&M) reported a 24% increase in sales at Rs 247.4 crore (Swedish Krona 'SEK' 305 million) from Indian operations for the fourth quarter of 2017 as compared to same period last year.
The global fashion retailer, which follows the December to November period as its financial year, recorded 95% growth in sales for the full year of 2017 at Rs 956.35 crore (SEK 1,179 million) over fiscal 2016. Currency conversion (SEK to INR) is based January 31, 2018, rates.
Karl-Johan Persson, chief executive officer, H&M, said the group continued to grow globally in 2017 and sales including value-added tax (VAT) increased by 4% to SEK 232 billion.
“The fashion industry is changing fast. At the heart of the transformation is digitalisation and it is driving the need to transform and re-think faster and faster. This is presenting many challenges but we believe we are well-placed to adjust to the new dynamics and take advantage of the opportunities in front of us,” said Persson in the company's annual report.
The group's global performance in 2017 was mixed with progress in some areas but also difficulties in others. “We delivered growth of 3% in 2017 (globally), which is clearly below our expectations. In the fourth quarter our sales overall decreased by 2% in local currencies. Our online sales and our newer brands performed well but the weakness was in H&M’s physical stores where the changes in customer behaviour are being felt most strongly and footfall has reduced with more sales online. In addition, some imbalances in certain aspects of the H&M brand’s assortment and composition also contributed to this weaker result,” Persson said in the report.
For the Indian market, H&M had targeted total store count of 25 by the end of fiscal 2017. However, it closed the year with 27 stores, as on November 30, 2017. Of the total number of operational stores, 10 were opened in the fourth quarter of 2017 while total new store openings for the full year 2017 stood at 15 outlets. The retailer currently operates 29 stores across India.
The retailer will also launch online sales in India this year while taking the franchise route to launch e-commerce operations in markets like Saudi Arabia and United Arab Emirates.
For 2018, the H&M group plans to open approximately 390 new stores globally and approximately 170 store closures are planned, resulting in a net addition of approximately 220 stores. The focus for new store openings in 2018 will be on growth markets Uruguay and Ukraine, the company said in the annual report.
Expanding its bouquet of offerings to the market, the retail group will be launching a new brand called 'Afound' in 2018. An off-price marketplace, Afound will offer products from well-known and popular fashion and lifestyle brands – both external brands and those from the H&M group.
“It will be launched in Sweden, with the first store in Stockholm opening in parallel with a digital marketplace in Sweden,” the company said in its annual report.
SPRUCED UP
- The firm recorded 95% growth in sales for the full year of 2017 at Rs 956.35 crore
- In India, H&M had targeted total store count of 25 by the end of fiscal 2017. However, it closed the year with 27 stores
