Retail giant H&M lagging behind competitors as shares drop

Lian Parsons
H&M is currently falling behind other competitors (Source: Retail Design Blog)

H&M’s shares dropped by nearly 5 per cent, the first downturn of its kind in four years.

The figures

H&M’s sales decreased 1 per cent year-on-year last month, bringing its shares down 4.5 per cent. This drop is the first of its kind in four years.

Fiscal first-quarter sales were up 5.5 per cent from £3.98bn to £4.2bn.

In January the company also launched a target for a 10 to 15 per cent annual sales growth and aims to be within that range starting this year.

Why it’s interesting

H&M has struggled this year compared to competitor and Zara parent company Inditex, which saw a 13 per cent increase in profits last year. In January, H&M’s share price fell 2.76 per cent. Its pre-tax profits also dropped 17 per cent in the three months to 31 March due to the strength of the dollar.

However, Inditex has a larger share of sales in emerging markets like Vietnam and New Zealand where it recently opened stores for the first time.

The total apparel market in Germany, H&M’s biggest market, fell 9 per cent last month, according to a survey of retailers published last week.

H&M wants to improve its online retailer and branch out into more brands to increase its customer reach.

What H&M said

H&M declined to comment further on the sales figures.

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