Retailers have plenty of reasons to put on a happy face when things might not necessarily be going so well on the black-and-white financial side of things. Whether it's to reassure shareholders or project an image to consumers, never admitting defeat is a go-to strategy of many a retailer - and it seems so too with H&M.
H&M released its Q2 earnings report Wednesday (June 22), and despite all the buzz around fast fashion, the chic brand is seeing its share of sales declining. Profit fell 17 percent in the second quarter alone for a drop of 22 percent for the first half of 2016. Q2 sales increased 2 percent, good for its lowest mark since 2013.
Despite all that, though, H&M CEO Karl-Johan Persson is still committed to an omnichannel expansion plan that would see 425 B&M stores and 11 new eCommerce operations come into being by the end of the year.
“It has been a challenging half-year for fashion retail in many markets, but we have great confidence going forward and are continuing to develop our offering further within all our brands,” Persson said in a statement. “The combination of strong brands, a large body of retail stores in good locations and a successful eCommerce business puts us in a unique market position for future growth.”
H&M does have some reason to be optimistic. Adjusted for holidays, May saw a sales increase of 11 percent followed by another 7 percent in the first three weeks of June. That may not be enough to justify the plans H&M is still committed to on its own, but right now, it's what the fast-fashion retailer has got to go on.