Despite the high costs of cotton which have effected many fashion retailers in the past year, Swedish fast-fashion retailer H&M reported banner 1st quarter sales up 13% and for the month of March—even better.
But the big news is their recent announcement for launching another retail chain in 2013. Here’s the latest from Karl-Johan Persson, CE:
“The new year has started well with a strong sales increase in the first quarter of 13 percent and 3 percent in comparable units. The positive development has continued in March, with very strong sales. Our collections have been well received which has resulted in increased market share in a very challenging fashion retail market, and we have strengthened our position even further. H&M is now present in 44 markets and our offering is appreciated by our customers worldwide.
H&M has a long-term perspective, we are investing for the future and we always have the customers in focus. Despite increased purchasing costs, we have continued to strengthen our customer offering – for example, by not raising our prices to customers. This has contributed to strong sales even if, combined with the increased purchasing costs, it has had a negative effect on the gross margin in the quarter. The increased purchasing costs are due partly to higher cotton prices at the time for sourcing for the quarter compared to the corresponding sourcing period the previous year, but also to our long-term investments aimed at broadening our total offering.
We are making these long-term investments in order to build an even stronger H&M, so that we can give our customers an even broader offering going forward. We have many different projects in progress and already next year we will be launching a completely new store chain. Like COS, which today is very successful with good profitability, the new chain of stores will be independent and complement the other offerings from the Group. We have great faith in this new brand and we see considerable potential for further initiatives.”
Tracking what happens with H&M is of importance when it comes to global youth culture for many reasons. It’s one of the leading fast-fashion retailers in the world and continues to create unique masstige collaborations with top designers. It’s also climbing the ranks as a preferred fashion brand and retailer among 13-25-year-olds in the United States.
Stay tuned for more about H&M and youth culture preferences from our Spring Youth Culture Study 2012.
