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H&M to close more stores

RBR Staff Writer Published 18 December 2017

Swedish fashion retailer Hennes & Mauritz Group (H&M) said it would close more stores as customers increasingly wish to shop online.

The company's sales between September and November dropped by 4% compared to the same period last year to 50.4 billion kronor ($5.9bn).

In a statement, the company said the H&M brand’s online sales and sales of the group’s other brands continued to develop well.

"Meanwhile, the quarter was weak for the H&M brand’s physical stores, which were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry," H&M said.

The company experienced imbalances in parts of its brand’s assortment composition.

H&M stated that in response the changing situations, it is now resorting to closure of stores and open few new stores.

One of the main reasons being attributed to the falling sales have been the changing preferences of people from stone and mortar stores to online shopping. The company had been slow to adopt to this change.

On the other hand, H&M’s main rival Zara, owned by Inditex, is said to have outperformed H&M, mainly because of having a flexible supply chain that lets it adapt quickly to change.

Quartz.com reported that by selling through Tmall in China, H&M could boost its sales in the country, which now stand at $1.3bn. This amount is a fraction of $23.5bn it sold this fiscal year. The company has been operating in the country for about a decade now and has more than 500 physical stores.

Image: Exterior view of H&M Store in Stockholm, Sweden. Photo: Courtesy of Robert Lindholm.