H&M makes a big e-commerce push
January 29, 2015 03:08 PM
Sweden-based Hennes & Mauritz AB, or H&M, is planning to sell online in nine more European countries by the end of the year. The move is part of a recent e-commerce push that included a more robust web site and steps to connect its web and mobile assets with its stores.
In its full-year and Q4 earnings yesterday, the retailer, No. 84 in the Internet Retailer Europe 500, said it will sell online in Belgium, Bulgaria, the Czech Republic, Hungary, Poland, Portugal, Romania, Slovakia and Switzerland in 2015. The apparel and accessories retailer also said it will launch H&M Beauty, which will carry make-up, body care and hair care products in around 900 H&M stores and online in autumn 2015.
“While we are continuing our long-term investments, at the same time we can see our investments in areas such as online starting to bear fruit,” says CEO Karl-Johan Persson. “This year we opened our online store in four new large markets: France, Italy, Spain and China. These openings, combined with further improvements in our online store, have naturally contributed to the year’s good sales development. We will therefore be rolling out H&M’s online store to nine new markets in 2015.”
On an earnings call with investors, executives outlined recent investments in e-commerce. H&M recently begin rolling out scan and buy in some stores, enabling shoppers to use a smartphone to scan an item in a store and order it online. This helps save a sale when a store is out of a shopper’s size or desired color, executives said. It also has improved navigation and search on its e-retail sites, as well as extended product selection and added more and higher-quality pictures.
For the fourth quarter, ended Nov. 30, H&M, which does not break out online sales, reports:
- Sales rose 17% to 42.6 billion kroner ($5.14 billion) compared with 36.5 billion kroner ($4.41 billion) a year earlier. Sales exclude the value-added tax the merchant collects in European countries; VAT is the equivalent of sales tax in the United States.
- Gross profit grew 16% to 25.77 billion kroner ($3.11 billion) compared with 22.18 billion ($2.68 billion) a year earlier.
- H&M opened its first stores in Manila, the Philippines, in October.
For the full year, the retailer reports:
- Sales excluding VAT grew to 151.42 billion kroner ($18.28 billion) up 18% compared with 128.56 billion kroner ($15.52 billion) a year earlier
- Gross profit increased 17% to 89.05 billion kroner ($10.75 billion) compared with 76.03 billion kroner ($9.18 billion) a year earlier.
- H&M added 379 stores during the year. It opened the most new stores in China and the U.S. It closed its financial year with 3,511 stores in 55 countries.
H&M made its long delayed e-commerce debut in the U.S.in 2013 after several delays. Nils Vinge, the firm’s head of investor relations, said on the earnings call that the U.S. is H&M’s second largest market behind Germany and makes a “strong online contribution.”