H&M Reverses Store Expansion Plan

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H&M Reverses Store Expansion Plan

By Jamie Grill-Goodman - 02/02/2017
After 2016 was "characterized by the shift in the industry towards an ever growing online market and by digitalization," H&M group is reversing on its ambitious store expansion strategy that would have increased the number of stores by 10 to 15 percent per year. This number will instead become a sales target that includes both stores and online sales, according to the apparel retailer's full year report.

"Our new growth target which applies for 2017 and going forward is for the H&M group’s sales to increase by 10 to 15 percent in local currencies per year with continued high profitability," H&M said in its report.

In 2017 the company plans to open approximately 430 new stores net and enter five new bricks-and-mortar markets – Kazakhstan, Colombia, Iceland, Vietnam and Georgia – and six new H&M online markets – Turkey, Taiwan, Hong Kong, Macau, Singapore and Malaysia.

The company will also review the existing store portfolio, which will lead to 
re-locations, adding new store space and closures. It does plan to open standalone H&M Home stores.

In 2016, H&M opened 427 new stores net worldwide and rolled out its online store to 11 additional markets. H&M is now present in 64 markets of which 35 offer e-commerce. 

"From an already high level we took further market share, which clearly proves that our investments in our online business have been successful," said the retailer.

H&M will continue with the investments it has been making for the past few years in digitalisation and infrastructure in the following focus areas:

Omnichannel strategy  

H&M's omnichannel strategy includes offering customers a more seamless shopping experience in online purchases and online returns in stores, click & collect, mobile payments, further development of the customer club and use of the mobile in stores for increased service.

Supply chain 

H&M is upgrading its supply chain to make it faster and more flexible – which includes investments in technology such as RFID and automatised warehouses. It is also adding new delivery options for customers, such as next day delivery which it now offers in five markets, and has also started offering time-slot deliveries in Japan.

Advanced analytics

The algorithms H&M has started to use will contribute to improvements within everything from assortment planning and logistics to sales.