Apparel Online Bangladesh Magazine Magazine May 2018 | Page 70

WORLD WRAP
Growth at
H&M slows
down…
Unsold inventory piling up
O
ver the last two decades, Hennes
& Mauritz AB (H&M), the Swedish
multinational clothing retail company,
known for its fast-fashion clothing for
men, women, teenagers and children,
has witnessed unprecedented growth
to become the No. 2 largest fashion
retailer in the world, second only to
the formidable Inditex group, owners
of the Zara brand. But it seems that
the retailer has peaked and growth
will now be a challenge, as the last
year saw a piling amount of unsold
inventory, worth US $ 4.3 billion.
Signs of slipping sales at H&M began
emerging in 2017, when it reported
an unexpected quarterly drop. The
trend was reinforced when the retailer
reported its largest annual profit drop
in six years, declining 13 per cent in
the 12 months leading up to November
2017. One of the first responses to the
declining sales was an announcement
to a slowdown in store openings. So,
while in 2017, the company added 388
stores, it plans to open fewer stores in
2018. According to reports, H&M plans
a net addition of about 320 stores in
2018; it will open about 390 stores and
close about 170.
Foot traffic in the last one year fell
for most fast-fashion retailers as
customers increasingly shunned
crowded shopfloors in favour of online
shopping, or lower-cost offerings
elsewhere. Interestingly, H&M already
has a significant online presence,
with e-shopping available in around
33 countries, including Kuwait, and
also India. Yet, it has not been able to
retain the intere