H&M plans to shut stores as Zara puts it in the shade
Fashion giant H&M was firmly on the back foot on Friday after it decided to shut a string of stores and slam the brakes on brick-and-mortar expansion.
The clothing retailer posted the biggest fall in quarterly sales in a decade as shoppers switch to online rivals.
The Swedish giant has been trying to resurrect sales with designer collections such as Erdem x H&M (pictured) and tie-ups with celebrities including David Beckham,
It said earnings in the three months to November were “significantly below [our] own expectations” . Sales excluding VAT were down 4% to 50.4 billion Swedish kronor (£5.94 billion).
Although the firm didn’t specify which stores it will shut, there are fears that its Oxford Street store could be a prime target as its pricey lease is expected to expire in 2019. Last year it closed a handful of stores in the UK. Investors were unimpressed that the brand was losing ground to Zara owner Inditex, sending the shares plummeting by 15%.
However, H&M said that its online sales were growing steadily and customers have been snapping up its other brands including & Other Stories and Cos.
The business is also pinning its hopes on its on-going partnership with Chinese e-commerce giant Alibaba to sell more of its wares there via its online platform Tmall.
