H&M shares plunge after ‘worst sales on record’

By Thomas Mulier

H&M shares plummeted after the Swedish apparel chain lost more ground to Inditex’s Zara, amid a crisis in brick-and-mortar stores that threatens to undermine retailers with underdeveloped online businesses.

H&M reported the biggest drop in quarterly sales in at least a decade as fewer customers visited its flagship brand’s locations, leading the company to pare expansion plans and consider closures. The stock fell up to16%, the steepest intraday decline since March 2001.

A crisis that has shuttered shopping malls in the US is spreading to other parts of the world, hitting H&M’s earnings and forcing the retailer to cut prices to clear out inventory.

Rival Inditex has been outpacing the Swedish company as it expands more aggressively in e-commerce. The Spanish company this week reported a double-digit rebound in revenue growth for November and early December. H&M reported “quite possibly the worst quarterly sales performance on record,” said Raymond James analyst Cedric Lecasble.

Sales excluding Vat fell to $6bn (€5.1bn) in the three months to November, the Stockholm-based fashion retailer said. H&M’s sales have declined in only three quarters in the past 10 years.

It said it aims to accelerate a plan to better integrate physical and digital stores, and it will give more details on changes at a February meeting with investors. The retailer said online sales and revenue of brands other than H&M have been going well.

- Bloomberg

More in this Section

Electric car maker Tesla to cut workforce by 7%

Grapevine: Savour Food sees companies save money and enhance environment

Ryanair lowers profit forecast for 2019

Update: US software company confirms 1,500 new jobs and new 'Salesforce Tower' for Dublin


Trend of the week: A salute to simplicity

Louis Vuitton debuted fibre-optic bags and the internet is obsessed

A strange stripe of super-star with daringly uncommercial music

From the Eiffel Tower to the Berlin Wall: The anniversaries to travel for in 2019

More From The Irish Examiner