PARIS — Against the backdrop of disappointing first-quarter results, Hennes & Mauritz AB said it is ramping up expansion and getting ready to introduce a sports collection in 2014.
The company said Thursday it will open 350 stores in 2013 instead of the 325 previously planned. “The growth target is to increase the number of stores by 10 to 15 percent per year with continued high profitability, while at the same time increasing sales in comparable units,” the company said Thursday.
Most new doors will open in China and the U.S., including two new H&M flagships in Manhattan later this year. Launches in Chile, Estonia, Lithuania, Serbia and — via franchise — Indonesia are also scheduled for 2013, while Australia is said to follow next year.
Estonia, Lithuania and Serbia will see two units each.
“We are also looking at more markets in the Southern Hemisphere, as we see great anticipation ahead of the opening in Chile,” said Nils Vinge, H&M’s head of investor relations during a conference call. The series of new openings brings “new opportunities even though the microeconomic environment is tough,” he said.
The global store count stood at 2,818 in 48 countries on Feb. 28, versus 2,491 stores last year.
A giant leap forward is expected this summer, when H&M will finally launch its online sales platform in the U.S., the world’s largest online market.
The Swedish fast-fashion chain, which is lagging behind with its online expansion, said it was working on its long-term investments in IT, online and the & Other Stories concept, which “has been tremendously well received at its launch this March.”
“Sales, both in stores and online, have far exceeded our expectations,” said group chief executive officer Karl-Johan Persson.
At the beginning of 2014, an “extended sports concept for women, men and children” will be introduced, broadening H&M’s range to include “sportswear and accessories in specially developed functional materials suited to various kinds of sporting activities.” The range will be initially sold in H&M’s existing online markets and select H&M stores in 15 countries, but will not include footwear.
“We have invested substantially in this concept and will continue to do so. We see very interesting potential. This is really a big thing,” said Vinge.
Expansion also continues for other brands of the group, though at a slower pace. Monki and Weekday will launch in Japan in spring of this year. A Monki shop will also open in Paris in spring, while Cheap Monday will follow in the fall. Non-H&M brands still represent a very small part of the group’s portfolio, though Vinge would not divulge any figures.
H&M, which will post its annual results on March 26, said after-tax profits in the first fiscal quarter fell 11.4 percent to 2.46 billion Swedish kronor, or $378.8 million, compared with the corresponding period last year.
“Profits have been negatively affected by large long-term investments but also by substantial negative currency translation effects,” the group explained.
Gross margin stood at 55.2 percent compared with 55.8 percent in the previous year.
All dollar rates are calculated at average exchange rates for the three-month period from Dec. 1 to Feb. 28.
“The first quarter has been characterized by the continued challenging situation for the fashion retail industry in many of our markets mainly due to a continued tough macroeconomic climate, but also due to unfavorable weather during parts of the quarter,” said Persson.
The group’s sales were up 2 percent to 33.1 billion Swedish kronor, or $5.1 billion, in the first quarter compared to the same period last year.
Although sales were strong in Asia, with China in the lead, “sales in the first quarter did not reach our expectations,” said Persson. This was especially true for Germany, H&M’s main market, where business was slow.
Shares of H&M closed up 0.71 percent to 228.2 Swedish kronor, or $35.32, on the Stockholm Stock Exchange.
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye