Belfast Telegraph

H&M shares plunge as sales suffer from online shopping shift

Shares in the group sank more than 12% on the Stockholm Stock Exchange.

Shares in Hennes & Mauritz (H&M) have plunged after the retailer moved to close stores following a customer shift towards online shopping and lacklustre trading in the fourth quarter.

The Swedish fashion retailer said sales excluding VAT slipped 4% to 50.4 billion Swedish krona (£4.5 billion) in three months to November, compared to last year, coming in “significantly below” expectations.

While online sales “continued to develop well”, it said bricks and mortar shops took a hit as more people opted to buy clothes and products online.

Shares in the group sank more than 12% on the Stockholm Stock Exchange.

Chief executive Karl-Johan Persson said: “In order to respond even quicker to customers’ fast-changing behaviour the company’s ongoing transformation journey is being accelerated.

“Among other things, this includes continued integration of the physical and digital stores, and intensifying the optimisation of the H&M brand’s store portfolio, leading to more store closures and fewer openings.”

On an annual basis, sales excluding VAT grew 3% to 199.9 billion Swedish krona (£17.7 billion) for the financial year.

H&M, which owns the COS and Cheap Monday brands, opened 24 UK stores and closed 13 leaving it with a total of 292 for 2017. Across the globe, the retailer has 4,739 stores.

The update comes after UK retail sales remained stronger than expected last month as businesses reported a Black Friday sales boost.

Sales in November were up 1.6% on the same time last year despite rising inflation and stagnant wage growth, the Office for National Statistics (ONS) figures show.

Weekly Business Digest Newsletter

This week's business news headlines, directly to your inbox every Tuesday.

Popular