Last week fast fashion retailer Hennes & Mauritz (H&M) announced that they plan to continue to open stores at a rapid rate. According to H&M’s CEO Karl-Johan Persson, they are aiming to double their number of stores. ‘I think we will go to 7,000-8,000 stores plus and beyond…we’re not stressed to reach a certain size or to be number one but it’s still expansion ahead of us’.
As a bit of context, H&M’s increase in store count would put it level to Zara.
The reason this is interesting is that it comes at a time when Zara has chosen to slow it’s store openings in favour of focusing on building their ecommerce ability; and industry disruptor Amazon has unweighted it’s investment in fashion – through a roster of new private label fashion brands as well as fashion-focused marketing (eg. they were the principle sponsor of NY Men’s Fashion Week).
This plan to create growth through increased store openings came during their quarterly earning report, where H&M announced that their earnings had fallen the most in 5 years (due to the strong dollar inflating the cost of Asian-made garments). Earnings before interest and tax were down 29% to $3.27B Kronor (US$400M), in the 3 months to February.
Another interesting part of the release is that fact that H&M will unveil their long-rumoured new concept chain (to join the likes of & Other Stories, COS, Monki, Cheap Monday and Weekday). According to Persson ‘It will be a free-standing brand’. The first store is due to open in 2017.