Sweden-based fashion retailer Hennes & Mauritz (H&M), has announced financial results for the first half-year concluded May 31, 2018. During the period under review, it reported sales including VAT to SEK 114,017 m (113,907) while sales including VAT remained unchanged in local currencies during the reporting period.
The fashion giant which has been going through a period of transformation to make the company even more customer-driven, efficient, and flexible, reported 2 per cent increase in sales including VAT during second quarter to SEK 60,463 m (59,538).
The second quarter results were impacted by interruptions in connections with transitions carried out in major markets such as USA, France, Italy, and Belgium.
The retailer is optimistic about track being followed as it reported considerably faster growth in Sweden, Norway, Denmark, and Eastern Europe as compared to other markets. Digital investments and improvement work have started delivering results for the retailer.
However, very high inventory levels at the end of the period were a major reason which stopped it from getting satisfactory sales report in the quarter. The retailer which has been working on its expansion globally has also announced to foray into Bosnia-Herzegovina market in 2019 while online operation is expected to kick off in Mexico.
“We anticipated having a tough first half-year. We need to deal with imbalances in the H&M assortment which are being rectified gradually,” stated Karl-Johan Persson, CEO.
Additionally, the fashion retailer is prepared to start around 390 stores most of them in emerging markets while established markets will witness closure of 150 stores. Established markets will also witness opening of stores of its newer brands.
Meanwhile, the Swedish retailer also reported fair sales in Tmall in the first couple of months which ultimately positively impacted sales figure in China. Despite challenges, H&M is ready to do a lot of hard work for gradual improvement to see a stronger second half.
