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H&M annual sales up 19 percent, rapid retail expansion on cards

By Prachi Singh

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Business |REPORT

During the year 2015, H&M has confirmed in its annual results that sales totaled 210 billion Swedish krona (25.7 billion dollars) including VAT, which is an increase of 19 percent in SEK. In local currencies the increase was 11 percent. Profit for the year after tax increased to 20.9 billion Swedish krona (2.5 billion dollars). For the full financial year, profit after financial items increased 5 percent.

2015 has been a very expansive year for the H&M group. The group opened 413 new stores net, of which 249 in the fourth quarter, as well as ten new H&M online markets, and successfully established stores in the new markets of India, South Africa, Peru, Taiwan and Macau.

“2015 was another year of rapid expansion and well-received collections for all our brands. Now we are continuing to develop our offering and will open 425 new stores and offer e-commerce in a further nine H&M markets in 2016,” said H&M CEO Karl-Johan Persson.

2015 - a year of retail expansion

In total, at the end of the financial year H&M had stores in 61 markets and offered online sales in 23 of these. Sales developed well in 2015 for all the group’s brands: H&M, H&M Home, COS, & Other Stories, Weekday, Monki and Cheap Monday.

The existing product range is also being broadened. These long-term investments aim to further strengthen the H&M group’s market position and secure future expansion. H&M’s growth target remains intact. The growth target is to increase the number of stores by 10–15 percent per year with continued high profitability. China and the US will once again be the markets with the most new stores. Three new markets are planned for 2016: New Zealand, Cyprus and Puerto Rico, which means that by the end of the financial year H&M will be present in 64 markets.

To expand footprint in new markets

H&M currently offers online shopping in 23 markets and the global rollout of H&M’s online store continues. During 2016 H&M plans to offer e-commerce in a further nine of H&M’s existing markets. These countries are Ireland, Japan, Greece, Croatia, Slovenia, Estonia, Latvia, Lithuania and Luxembourg. The group’s other brands – COS, Monki, Weekday, Cheap Monday and & Other Stories – are planned to continue expanding at the same rate as in 2015.

The main focus of this expansion will be on COS, which will open most of its new stores in existing markets but will also open stores in five new markets: the Czech Republic, Romania, Latvia, Malaysia and Saudi Arabia. In addition, & Other Stories, Monki and Weekday will grow by opening stores in both new and existing markets. H&M Home will also continue its rapid expansion, with around 60 new H&M Home departments.

“We will expand within our growth target, which is to increase the number of stores by 10–15 percent per year with continued high profitability. We are also looking forward to opening our first stores in New Zealand, Cyprus and Puerto Rico, which means that by the end of the year H&M will be present in 64 markets,” added Persson talking about the year ahead.

H&M