H&M’s maiden year in India was profitable and clocked significantly higher sales than Zara, according to a report in a leading Indian daily. H&M’s Indian unit posted Rs. 194 crore in sales during year-to-March 2016, with a net profit of Rs. 1.4 crore.
With just four operational stores last fiscal – the first one opened in October followed by another in November and two more in March – the Swedish retailer’s performance is the best that the retail market has seen within the apparel space.
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“H&M is in India for the long term, we look forward to continue strengthening our offer and cater to our customers across the country,” said an H&M spokesperson.
The retailer registered more than Rs. 1.75 crore in sales on the opening day of its first store in India, almost double the sales of Zara on its inaugural day five years ago at the same location, in New Delhi, India. At present, H&M has expanded to 12 outlets with plans to open another 38 by 2020.
In comparison, Zara posted its slowest growth in India at 17 per cent in FY 2016, indicating waning of its novelty factor and a few consumers shifting to global rivals such as H&M and GAP. Zara’s sales have doubled every two years and touched Rs. 741 crore in FY 2016. While experts feel H&M could also face a similar challenge, its large assortment and reasonable pricing could help sustain high sales.
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