H&M profit slides as mild winter bites
26 January 2012 10:16
Swedish fashion retailer H&M Group has reported a fall fourth quarter profit of 2.4%, as a mild winter hit sales of coats and scarves. However, the company said that it was gaining market share and planned to expand its reach with approximately 275 net new stores.
Commenting on the full-year by Karl-Johan Persson, CEO, said: "H&M stands strong in a challenging market. We increased sales by 8 percent in local currencies and continued to gain market share during what was one of the toughest years for a long time for the fashion retail industry in many countries. The fact that we have gained market share, proves that our customers appreciate our collections, which offer a wide range of inspiring fashion for everyone.
"The situation in the sourcing markets has also been challenging. Cost inflation has been high resulting in increased purchasing costs for the fashion retail industry. Despite increased purchasing costs, we chose a strategy of strengthening our customer offering and market position even further relative to competitors. The investments have varied over time and have involved everything from even better prices to even higher quality and more sustainable materials. We are convinced that this will gradually become more evident to customers and will strengthen H&M's already strong market position even further.
"Our strong expansion continued during the year. We opened 266 new stores net, five new markets were added and we created around 7,000 new jobs. Today we have a strong global presence with around 2,500 stores in 43 markets and more than 94,000 employees.
"We are also planning for a strong expansion in 2012 with approximately 275 new stores net. The countries in which we will open the most stores during the year are China, the US and the UK. Bulgaria, Latvia, Malaysia and Thailand will become new H&M markets. We also plan to open in Mexico during the autumn 2012, it will be our first store in Latin America. This will make a total of 10 new H&M markets over a period of two years. Expansion will also continue within our other brands such as COS and Monki, including the opening of the first COS stores in Hong Kong, Italy, Finland and Kuwait.
"The new year has started well, with strong sales development in both December and so far in January. Most indicators suggest that the macro-economic climate in many of our markets will continue to be tough during 2012, but we have a strong belief in our offering and are convinced that H&M will continue to maintain its strong position as the year goes on. We are looking forward to an exciting year full of opportunities."
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