367
Fashion Jobs
SHISEIDO
FP&A Manager (Korean Only)
Permanent · SEOUL
AESOP
Aesop Hanam Starfield - Retail Consultant
Permanent · HANAM-SI
ADIDAS
Senior Specialist, Buying & Trading, E-Commerce
Permanent · SEOUL
ADIDAS
Manager, Personalization & Apps, E-Commerce
Permanent · SEOUL
ADIDAS
Senior Manager, Legal Counsel, Legal
Permanent · SEOUL
HENKEL
Finance Business Controller For Shiseido Professional Brand
Permanent ·
L'OREAL GROUP
[l'Oreal Korea] Kiehl's - CRM & Trade Mkt sr. Specialist~Manager
Permanent · SEOUL
L'OREAL GROUP
[l'Oreal Korea] (jr.) Claim Substantiation Specialist - Corporate Regulatory Affairs
Permanent · SEOUL
L'OREAL GROUP
[l'Oreal Korea] (sr.) Product Manager - Kerastase Marketing Team, Ppd
Permanent · SEOUL
UNDER ARMOUR
Associate, HR Administration
Permanent · SEOUL
ARKET
Visual Merchandising Manager
Permanent · BUSAN
PUIG
Marketing Manager
Permanent · SEOUL
JAEGER
[Jaeger Lecoultre] Marketing & Communication Director
Permanent · SEOUL
ESTÉE LAUDER COMPANIES
Corporate Account Executive For Travel Retail Korea, Estee Lauder Companies
Permanent ·
ESTÉE LAUDER - BRAND
Assistant Education Manager, Estee Lauder
Permanent · SEOUL
L'OREAL GROUP
[l'Oreal Korea] Luxe Div. - Lancome E-Commerce Specialist
Permanent · SEOUL
COS
Instore Visual Merchandiser Manager_seoul/Gyeonggi
Permanent · SEOUL METROPOLITAN AREA
AESOP
Shinsegae Gwangju - Retail Consultant
Permanent · GWANGJU
COACH
Manager, Ecommerce
Permanent · SEOUL
ADIDAS
Manager, Business Planning & Analysis, Wholesales
Permanent · SEOUL
HENKEL
Adhesive Key Account Manager For Sports And Fashion Market
Permanent · BUSAN
HENKEL
Consumer Brands General Manager Assistant
Permanent ·
Published
Feb 14, 2018
Reading time
3 minutes
Download
Download the article
Print
Text size

New Year discounts dent H&M but digital and new chains are sales drivers

Published
Feb 14, 2018

Fashion retail giant H&M held a Capital Markets Day on Wednesday as it sought to soothe investor fears over its growth prospects following anaemic sales at its core chain.


Cos



And it chose to focus on the prospects for its newer brands and the digital channel as it said that 2018 profits should be boosted by e-tail growth of at least 25% this year. Meanwhile, newer brands like Cos, Arket and H&M Home should also sprint ahead with a similar growth level.

But the company wasn’t completely upbeat and said that "in view of the ongoing shift in the industry and the H&M group’s ongoing transition work, 2018 is expected to remain challenging. H&M’s sales in comparable stores are expected to remain negative with a gradual improvement during the year.”

It added that “a tough start with high opening stock levels from Q4 2017 and imbalances in the product range are resulting in high markdown costs, with a negative effect on earnings at the start of the year.”

CHALLENGES AND OPPORTUNITIES

H&M has been opening new chains at a relatively fast speed but as its statement shows, it has also been battling challenges at the original H&M business. For that chain, a combination of intense competition from both physical and online rivals, plus a few product missteps have held it back.

Those problems have caused the company’s share price to fall for several years now, although while the shares are significantly lower than their price of a year ago, they have been rising this month and continued their move upwards in early Wednesday trading.

This Capital Markets Day is a key development in driving that share price and is the first time the company has held such an event. In its release ahead of the day’s proceedings, the company said that as well as e-tail sales rises and new brands boosting growth at the moment, they should continue do so in fiscal 2019 through to 2022. 


H&M


The group also expects H&M's physical stores to return to growth from next year as it continues to open new locations. The company said that newly-opened stores have “very good terms and flexibility [and] the average payback period for new stores is less than 17 months.”

But given the surge it’s seeing in e-tail sales, that’s as much of a key focus for the firm and it said that its e-sales are “growing well and amounted to SEK29 billion,” in the last fiscal year, or 12.5% of total group sales. The online channel is also “showing good profitability and accounted for 22% of the H&M group’s operating profit.”

Online sales should rise by around 20% a year and reach SEK75 billion in 2022. That’s lower than the 25% predicted for the current year but is still a strong growth figure.

So it’s no shock that 45% of the group’s total investment spend in the past financial year was in digital.

NEW CHAINS

It’s also spending heavily on new brands. The core H&M chain is still the biggest business in the group with its “new business” (comprising Cos, Weekday, Cheap Monday, Monki, H&M Home, & Other Stories and Arket) all adding up to only 7% of its sales. 


Monki



Yet that percentage can only grow as the company rolls out new stores and websites for its smaller chains and their current SEK17 billion in sales is set to multiply as this happens. As mentioned, their sales are set to power ahead by at least 25% a year and should reach more than SEK50 billion in 2022.

H&M also said it expects store expansion to add 1% to 3% to sales each year and sees “great opportunities for further additional sales from two separate and completely new business models that the company is currently developing.”

Copyright © 2024 FashionNetwork.com All rights reserved.