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With Easing Pandemic Restrictions, H&M Reports Surge In Sale


06/17/2021


With Easing Pandemic Restrictions, H&M Reports Surge In Sale
With restrictions imposed because of the Covid-19 pandemic being eased in many markets and with continued strength in online demand for its products, the fashion brand H&M reported a jump in sales in the period between March to May compared to a year earlier even though the revenue of the company were well below its pre [pandemic levels for the same period.
 
There was a 62 per cent year on year rise in the sales of the company for the aforesaid period – the second fiscal quarter for the company, which was equivalent to a 75 per cent rise when measured in local currencies, at 46.5 billion crowns ($5.59 billion), said the second largest fashion retailer of the world.
 
However despite the huge year on year rise, the revenues of the company were still 19 per cent lower compared to the same period two years earlier, because the physical stores of the company still remained closed for most part of the quarter in Germany and France which was compounded with slow growth in footfall in in many stores that were opened during the period.
 
"As more people are vaccinated a number of markets have gradually allowed stores to reopen and the H&M group's strong recovery continues," the company said in a statement. "Online sales have continued to develop very well, even as the stores have opened. This shows that customers appreciate the collections and being able to shop via their preferred channel," the company added.
 
Much of the global trade and retail activity was brought to a grinding halt in the same quarter a year earlier because of the restrictive measures imposed by authorities to tackle the spread of the Covid-19 pandemic which also hit the Swedish group as it was forced to keep about 4,000 of its 5,000 stores completely closed during the period.
 
There was a 35 per cent year on year jump in the sales of the company when considered in the local currency and was up by 2 per cent when compared to the same period  two years ago, H&M said.
 
A recovery in sales primarily because of easing of pandemic induced restrictions also prompted reporting of sales recovery by industry leader Inditex, the owner of Zara, and smaller rival Next.
 
The quarterly sales of H&M matched local currency expectations, said analysts at JP Morgan, but added that  the early trends for sales for the fashion retailer for June indicated a slower than expected recovery for the company as well as when compared to the recovery rate of Inditex which was exposed much less to Germany.
 
During a period when the wider market in Stockholm was slightly up, the stocks of H&M were down by 1 per cent which took the year to date growth in its stock value to 21 per cent.
 
In the back of expectation beating profits for the Fenruary-april period, last week Inditex reported its sales in May and early June to be higher than the comparable period from two years ago.
 
(Source:www.economictimes.com)