H&M Ready to Focus on is e-Commerce Expansion Through Discount Model
Hennes and Mauritz is putting a halt in is physical store expansion, as the brand aims to expand its e-commerce unit widely as it is lagging behind many of its competitors. In 2018, the brand will open 390 new stores and will close 170 stores, making a total of 220 operation store existence. However, in 2017 it had added 388 new stores to the existing count.
Though the company is willing is go slow in its expansion, it will launch a new brand “Afound” this year with a brick-and-mortar store in Stockholm and an online sire. This store will have products from many other brands as well as its own brand.
The company is coming up with its new plans after witnessing a remarkable drop of 13% in its profit during the last six years. It expects a rise of 1% in its profit from Dec 1st to January 31st after recording a fall of 2% in the September to November quarter.
The company plans to invest a lot in technology to upgrade its supply chain management making it more flexible and fast. Its rival Inditex’s Zara is well-known for its supply chain prowess. But this time with online sites coming into action, the brand may reach to wider section of buyers and can get the advantages of online shopping during the festive seasons.
“The industry changes are challenging everyone and this will continue in 2018,” stated H&M CEO Karl-Johan Persson, who is the grandson of company founder Erling Persson.