H&M Sees Biggest Profit Drop in Years, Points to Decline in Store Traffic
PARIS — Hennes & Mauritz AB reported a 13 percent dip in full-year profit, highlighting its struggle to grapple with the shift of consumption to digital avenues.
Profit for the year ending Nov. 30 was 16.18 billion kronor, or $2.05 billion, the fast fashion retailer said, noting online business has not grown fast enough to compensate for the decline in store traffic.
In addition, the retailer said it was launching a new discount marketplace for fashion and lifestyle products that will feature both external and H&M group brands. Named Afound, it will present seasonless items in a variety of price segments both online and in stores, starting this year with a first unit in Stockholm.
Sales for the year rose 4 percent, including VAT, to 232 billion kronor, said the Swedish retailer, a number that they said was below expectations.
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“Underneath the disappointing recent performance, we see reasons for optimism, but we need to accelerate the transformation,” noted the company, which has plans to outline its strategy at an investor day on Feb. 14.
It said it will add its H&M and H&M Home labels to Alibaba’s online e-commerce platform Tmall in March 2018.
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