The Swedish chain of clothing stores H&M recorded an increase in sales and an unexpected increase in profits.
Source: Pixabay.com
Last Thursday, March 30, this chain of retail establishments published a press release, according to which in the period from December to February, sales of the company’s stores increased by 12%. Also during this period, the retail chain made a profit of 725 million Swedish kronor (about $ 70 million).
H&M CEO Helena Helmersson says that the positive financial performance over the past winter is due to several factors. She noted that the company has actively invested in technologies based on artificial intelligence. The chain of stores also spent money on improving the supply chain. Another factor that has a positive impact on sales and revenue is the expansion of the product range adapted to the regional specifics of each group of customers.
Investments in technology and supply chain have led to the fact that the company has demonstrated results that are directly opposite to the negative expectations of analysts who previously predicted that H&M would report losses by the end of winter. After it became known about the growth of sales and profit, which became the largest in the last 20 years, the value of the shares of the trading network increased by 19%.
Helena Helmersson also reported on the growth of portfolio brands such as Arket, whose sales have tripled since 2019.
The general director of the retail chain plans to combine the company the Sellpy used clothing platform, investments for the development of which H&M began allocating 10 years ago. Helena Helmersson expects the merger visualizes the cost of the platform and generates a revaluation effect of about SEK 1 billion ($96.5 million) per quarter.
The retail chain has also established cooperation with the fashion resale platform ThredUp.
H&M currently operates in a highly competitive environment. A particularly strong rivalry is observed in the field of fast fashion, where the owner of Zara Inditex reported an 18% increase in profit by the end of 2022. There are also new players in this sector, such as Shein, which is going to go public, and Temu, who announced herself in a couple of Super Bowl commercials this year.
As we have reported earlier, H&M trials new marketplace model.
