Hennes & Mauritz predicts online sales growth on 25% this year, followed by 20% annual growth in the four years to 2022, as it endeavours to revive the performance of its stores.
The Swedish low-cost fashion retail multinational outlined strategy at its first-ever capital markets day in Stockholm. H&M warned that like-for-like sales were expected to continue to fall through a difficult year but investment in its newer brands and website gave “good opportunities for a somewhat better result” than in 2017.
The company said that it expects its physical stores to resume like-for-like sales growth from 2019, with “considerably lower markdowns” compared to last year expected to help generate “good increases in profit”.
H&M has been lagging online rivals such as Asos and Spain’s Inditex, parent of the Zara chain and has also suffered from saturation and competition on the high street and in shopping centres.
Sales from H&M’s new businesses, which include brands such as Cos, & Other Stories and Monki, are forecast to grow by 25% annually over the next four years to reach SKr50bn (€5.04bn) by 2022.
Online sales accounted for around an eighth of total sales last year, it said, at around SKr29bn, and represented just over a fifth of its operating profit, while new brands contributed to 7% of total sales.
H&M, which has been closing underperforming stores, added that there were “great opportunities for further additional sales from two separate and completely new business models that the company is currently developing”, but didn’t elaborate on the details.
H&M shares eased following the update and were 2.5% lower at around SKr138 in morning trade.