Hennes and Mauritz also plans to bring online sales to 11 new countries this year, including Ireland and Japan
Paris: Hennes and Mauritz AB chief executive officer (CEO) Karl-Johan Persson forecast the clothier will double its number of stores to close the gap with larger rival Inditex SA and as Amazon.com Inc. increases competition in fast fashion.
“I think we will go to 7,000, 8,000 stores plus and beyond," Persson said on Wednesday in a phone interview. “We’re not stressed to reach a certain size or to be number one but it’s still expansion ahead of us."
H&M would reach that level within four to eight years, based on its goal of increasing its store count 10% to 15% a year. The expansion comes as e-commerce giant Amazon.com reportedly has introduced a roster of private-label fashion brands and Zara-operator Inditex reins in plans to increase store space in favour of investing online.
The Swedish retailer reported quarterly earnings Wednesday that fell the most in five years as the strong dollar inflated the cost of Asian-made garments. Earnings before interest and tax fell 29% to 3.27 billion kronor ($400 million) in the three months through February. Analysts predicted 3.21 billion kronor, according to the average estimate. Gross margin of 52% slightly beat analysts’ estimate of 51.5%.
Inditex has more than 7,000 stores, according to Bloomberg data. H&M had 2,000 stores in 2010 and soon will open its 4,000th in New Delhi. H&M also plans to bring online sales to 11 new countries this year, including Ireland and Japan.
“I’m a huge admirer of Amazon," said Persson. “H&M and many other companies will bring something different to the fashion world, and I think we can fare well, as we have shown."
H&M is also investing online “where we have good profitability," Persson said. And H&M is set to unveil more details of a new chain it has in the works in the latter part of this year, he said.
“It will be a free-standing brand," Persson said. The first stores will open in 2017. Bloomberg
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