There’s at least one retail sector bucking the recessionary headwinds: fast fashion.
On Thursday, Sweden’s Hennes & Mauritz and Spain’s Mango reported strong growth in 2008 — and bullish plans for expansion this year. H&M remains committed to opening 225 stores worldwide, adding 7,000 jobs. Mango, meanwhile, plans to unveil 150 stores.
The openings continue aggressive expansion plans by all the major fast-fashion retailers, from Zara to Uniqlo. With competition in more mature American and European markets stiffening and economies in recession, fast fashion is looking to expand in new growth markets around the world, from China to the Middle East.
And these store openings already are contributing to growth. H&M on Thursday reported a 13 percent increase in aftertax profits for 2008 to 15.29 billion Swedish kronor, or $1.89 billion at average exchange, beating most analysts’ expectations. Sales for the year reached 88.53 billion kronor, or $10.94 billion, up 13 percent.
Also on Thursday, Mango revealed an 8 percent increase in sales last year to 1.4 billion euros, or $1.87 billion, at current exchange rates.
But the recession is having some impact. Sales in the fourth quarter hit 26.31 billion kronor, or $3.25 billion, up 15 percent, boosted by store openings around the world, including H&M’s first stores in Tokyo. On a like-for-like basis, however, sales in the three-month period shrank 3 percent, underscoring the challenging holiday season for retail across Europe and America. Like-for-like sales for the year fell 1 percent.
H&M said sales in December rose 3 percent, and that it expects sales in January to increase 8 percent.
“It goes without saying that H&M has been affected by the global business cycle,” Nils Vinge, H&M investor relations manager, said on a conference call.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)