H&M cuts new stores in favour of digital channels
Written by Hannah McGrath
H&M is cutting the number of new store openings planned for 2019 by 45, as it shifts investment into digital channels.
The Swedish fashion giant announced a 12 per cent sales rise in June, pushing overall sales for the second quarter up 11 per cent, exceeding analyst expectations.
The company said that an increased focus on online shopping would mean the previously announced figure of 175 stores in the next 12 months would be reduced by 45.
The company’s second quarter report said: “The company is accelerating its adaptation to customers’ changed shopping patterns and has therefore revised the number of new stores downwards in favour of even more digital investments.”
The retailer, which is the world’s second largest clothing company after Zara owner Inditex, is planning to launch online shopping in Thailand, Indonesia and Egypt in the second half of 2019.
In the autumn, H&M is set to launch on India’s largest e-commerce platform, Myntra, and in China & Other Stories will open on Alibaba’s Tmall platform.
The company outlined its plans to drive forward with its roll-out of new concepts and experiences in its physical store network and committed to optimising its online stores with improvements including “faster and more flexible delivery options and payments”.
It said it would continue with an omnichannel strategy of integration of our physical stores and online stores to enhance the customer experience. To that end, the company said it would continue to invest in infrastructure through its tech foundation, including “robust scalable platforms that enable faster development of various customer apps and new technologies”.
Karl-Johan Persson, chief executive of H&M, said: “By continuing to integrate our physical and digital channels we are making the shopping experience inspiring, easy and convenient for customers wherever we meet them.
“Our new online platform and our new logistics systems have not yet achieved full efficiency,” he explained: “But for customers have resulted in improvements such as faster and more flexible deliveries and a more seamless shopping experience.”
Persson concluded: “Our transformation work in response to the rapid shift in fashion retail is continuing at full speed. While the costs of this have held back profitability in the short term, we remain convinced that our focus on meeting customers’ increased expectations will contribute to a gradual increase in profitability and to long-term positive development for the H&M group. ”