H&M quarterly sales shrink 4%

Galtero Lara
Diciembre 15, 2017

Shares in United Kingdom retailers Next Plc (LON:NXT) and Marks & Spencer PLC (LON:MKS) slumped after fourth quarter results from H&M highlighted the struggles bricks-and-mortar stores are facing.

Fourth quarter sales shrank 4 percent year-on-year, or 2 percent in local currencies, to 50.4 billion crowns ($5.97 billion), lagging a mean Reuters poll forecast for a 2 percent increase, or 5 percent in local currencies.

A survey by London-based market research and insights agency Trinity McQueen showed that 54% of shoppers do their Christmas shopping online. The H&M brand's online sales and sales of the group's other brands continued to develop well.

"In addition, there have been imbalances in parts of the H&M brand's assortment composition", it added, suggesting issues with the product ranges.

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After reporting sales in its fourth quarter would be "significantly below" its expectations, the company said it had been a "weak" period for the H&M brand's physical stores.

In response to the shift online, the company has chose to close more stores and open fewer new ones.

H&M has extended collaboration with Alibaba with the opening of its first store on Tmall, the world's largest e-commerce platform, during spring 2018.

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