H&M is expanding online while closing stores in a way that it says reflects the changes it sees in its customers’ behaviour. The store openings are in growth markets while the retail group, whose brands include Cos, Monki, Weekday and & Other Stories, is closing shops in its more established markets.
215 physical shops will be closed
Its current financial year H&M has so far opened 68 new shops and closed 230. In the fourth quarter it plans to open about 40 and close about 95. In total, a net 215 shops will probably close during the current financial year. As of August 31, the retail group had a total of 4,856 shops across its brands, of which 4,829 are H&M shops, 276 Cos and 108 Monki.
New shops are opening in markets where demand for H&M’s brands is growing. H&M opened in Panama in September, and next year will open in Ecuador, North Macedonia and Kosovo. As well as, via franchise, in Costa Rica and Cambodia. Those that are closing are mostly in established markets.
H&M is launching more sites
At the same time, the retailer is launching new websites. H&M is to launch online in Chile this autumn, followed by Peru, Colombia and Uruguay next year. Meanwhile Cos will launch online in Australia at the start of next year. This autumn Monki will start to sell on the Zalora platform in the Philippines and & Other Stories will launch on Nordstrom in the US.
The H&M Group says that COVID-19 has accelerated the already ongoing transformation of the industry, with increased digitalisation that has rapidly changed customers’ behaviour. The current situation has changed the preconditions for, among other things, rental terms for stores. The retail group can renegotiate or leave leases on around a third of its shops every year.
Online sales growth of 39%
H&M Group reported sales in local currencies of SEK 142.2bn (£12bn) in the first nine months of its financial year. This was 13% up on the same time last year. The online sales growth was 39%. In the third quarter alone, sales rose by 14%, with online sales up by 22%. The UK is H&M Group’s third largest market, after Germany and the US.
H&M Chief Executive Helena Helmersson says that online sales have continued to grow. Meanwhile in-store sales are starting to recover from COVID-19 lockdowns. “To further strengthen our competitiveness the group continues to work to constantly improve both the customer offering and the customer experience in response to customers’ increased expectations, such as being able to shop in a smooth and convenient way – when, where and how they choose.”
“Our customer offering makes it possible for many to access sustainable fashion and express their own personal style. Our financial strength and long-term approach give us the ability to invest in innovations within tech development, materials and sustainable initiatives, with an ambition to lead the change in the fashion industry towards becoming circular and renewable.” This was recognised recently when the H&M Group was named as the only retail company in the world to live up to the UN Global Compact sustainability principles.
COVID-19 consequences are not yet over
“The pandemic and its consequences are not yet over and we are humbled by the many challenges in the world around us that affect our business, which call for a high level of flexibility and drive. We have quickly adapted by prioritising cash flow, cost control and flexibility. With our continued transformation and our well-positioned customer offering – to meet customers’ ever increasing expectations of good value and sustainable fashion – we are optimistic that we will see long-term, profitable and sustainable growth for the H&M group.”