One of the biggest fast-fashion company in the world recently unveiled their troublesome quarter due to reseeding shoppers visiting their brick-and-mortar stores. The fashion retailer looks to extend its prowess on their online shops and upgrade their online shopping experience with better investments on their website and other similar future plans.
H&M also announced that they are expecting a massive dip in their quarterly sales due to fewer shoppers and the shift to online shopping also managed to hurt the company’s previous performance. According to reports, the likes of Zara, this is a fast fashion company as well, has also been bleeding due to the massive shift to online shopping.
Comparatively, H&M is the second largest fashion retailer in the world, only second the Zara and both companies have been seeing a dying trend on brick and mortar shopping. Reports also revealed that both companies have been expecting bigger and fiercer competition.
H&M Previous Quarter
According to the retailer, the company managed to drop a total of 34% on their quarterly profit as its core brand’s stores receive a fewer number of shoppers. It has been a rising dilemma for the retailer to keep up with the online shopping bonanza; this has been a similar problem from Macy and other bigger retailer as shoppers favor online shopping in the last couple of years.
The company’s shares were also down after the struggling quarterly report; the company saw a massive 5.8% decline in midday trading. The drop holds the record for the single worst dip in the flat European retail sector index.
H&M Future Plans
Due to the weak and lackluster figures, H&M announced their future plans and steps this 2018; according to the company, is looking to add fewer stores this year and are looking to approximately add a total of 220 stores from a total of 388 planned store they have last year. The retailer is also looking to expand their dominance to the Uruguay and Ukraine market.
The company mentioned that “The industry changes are challenging everyone and this will continue in 2018”, and In view of continued high investments in areas such as digitalization, the board of directors is to investigate the possibility of offering all shareholders an opportunity to reinvest the dividend received in newly issued H&M shares.”
Morgan Stanley’s analyst Geoff Ruddell and Amy Curry also mentioned that "The scale of the reduction will surprise some today. And it will leave the bears questioning why H&M still enjoys a 'growth stock' rating," and they also market the company as “underweight”.
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