H&M sales growth short of forecasts
Fashion retailer see performance slowing
August 15 2003
Clothing retailer Hennes & Mauritz has reported July sales 8 per cent higher than the same month a year ago.
H&M’s performance was below market expectations for the sixth month in a row, with analysts having been forecasts a sales rise ranging between 7 per cent and 15 per cent. In July 2002, sales rose 18 per cent year-on-year.
The Swedish retailer has seen sales hit by lower clothing demand due to warn summer weather in many of it key markets, including the UK and Europe.
H&M investor relations chief Carl-Henric Enhorning told news agency Reuters this has led to understocking. He said: “We are not quite happy with the sales figures. It has been very hot weather in the markets which are important for us, and we have been a bit too cautious.”
However, there are also concerns that H&M is reaching maturity in these markets after a long period when sales were driven by store openings.
Increased competition from rivals such as Zara is also seen as a factor. The Spanish retailer is on an expansion drive through Europe, and is growing sales faster. Zara, which sources most if its products in Europe while H&M sources about half in Asia, has shown intself to be more responsive to changing consumer demand than its Swedish rival.
Meanwhile, the US, which is one of H&M’s main regions for expansion, continues to be hit by slower consumer demand.
