H&M, the Sweden-based fast fashion brand, witnessed a slump in its profits in the year to 30 November 2018.
The drop in the profits has been attributed to online investment.
2018 had seen H&M start a transformation programme wherein it invested US $ 48.5 million on logistics and digital technology with the intent to enhance its range of products and shopping experience.
The programme also included an upgradation in its mobile application, quick delivery as well as rollout of click-and-collect.
Karl-Johan Persson, CEO, H&M said that though the upgradation in company’s logistics systems increased the cost, but led to range of improvements for its shoppers.
He further added that though the first half of last year was very difficult, by the second half the company’s transformation efforts were getting visible.
H&M witnessed an increase of 5 per cent in full-year revenue to US $ 22.7 billion. In local currencies, the net sales increased by 3 per cent; the profit, however, slumped by 21.8 per cent to US $ 1.3 billion.
Notably, the online sales increased by 22 per cent to reach US $ 3.2 billion and comprise 14.5 per cent of company’s total revenue.
The company is also working on a new H&M concept store.