H&M Reported Huge Profit and Plans to Open 400 More Stores

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H&M to open 400 Stores in 2016 After 24 Months of Massive Profits

Hennes & Mauritz AB, commonly known as H&M, dominated the clothing retail in 2014-2015 and plans to make another huge step this year. It is expected H&M to Open 400 Stores around the world in order to continue its aggressive expansion.

The Swedish brand is currently the second biggest clothing retailer in Europe an reported a profit leapt of no less than 17% for the last year.

the net income rose to $760 million, even more than the average of analyst estimates put together by Bloomberg.

And if things are working out so great, H&M plans to add another 400 stores this year beside the already existing 3,511 locations worldwide.

Just this past year in 2016 the brand opened 379 stores, so if that led to such a big profit, you can imagine what 2015 will bring to the Swedish brand.

H&M To Open 400 Stores in 2015 After Last Year's Profit | Image Source: si.wsj.net
H&M To Open 400 Stores in 2016 After Last Year’s Profit | Image Source: si.wsj.net

The new stores planned for 2016 will mostly be spread across China and the U.S., but H&M said they will also expand to brand new markets such as South Africa, India and Peru.

The game remains though in the U.S. and China, with the U.S. becoming the second largest sales market of the company after Germany. Last year, H&M opened 51 new stores in the U.S. and the sales there increased with 26%.

H&M To Open 400 Stores in 2015 After Last Year's Profit | Image Source: www.modamob.com
H&M To Open 400 Stores in 2016 After Last Year’s Profit | Image Source: www.modamob.com

And things continue to look good for the company in 2016 as well, as Karl-Johan Persson, H&M’s CEO, said in a statement, this year:

has gotten off to a good start, with strong sales in both December and January

H&M To Open 400 Stores in 2015 After Last Year's Profit | Image Source: www.bloomberg.com
H&M To Open 400 Stores in 2016 After Last Year’s Profit | Image Source: www.bloomberg.com

The problem though will be the stronger U.S. dollar that is going to affect the company’s sourcing costs, but with the constantly rising profit I’m sure they’ll find a way to overcome this obstacle.

H&M is also concentrating on expanding online and tries to surpass other web rivals such as Asos Plc and Primark. And the guest collection by Balenciaga’s creative director, Alexander Wang they sold in November sure helped a lot.

The best thing about H&M is they recognize their mistakes and know exactly how to correct them. The company was pretty low in the range of shoes and sportswear and this was really dragging them down. Especially the sportswear which is a dominant trend in retail today, so they’re now broadening their offer in these two sections.

H&M To Open 400 Stores in 2015 After Last Year's Profit | Image Source: etaildesignblog.net
H&M To Open 400 Stores in 2016 After Last Year’s Profit | Image Source: etaildesignblog.net

And speaking of expanding their horizon, the Swedish brand has another surprise for us this year: a new range called H&M Beauty. The line will offer make-up and personal-care products and will initially debut in around 900 stores and online, starting this Fall.

Even though Inditex SA might currently be Europe’s largest clothing retailer, things aren’t lining up for them as their profit rose with only 0.8%, so I suppose it’s only a matter of time until H&M surpasses them.

H&M To Open 400 Stores in 2015 After Last Year's Profit | Image Source: stylelaboratoire.blogspot.com
H&M To Open 400 Stores in 2016 After Last Year’s Profit | Image Source: stylelaboratoire.blogspot.com

What do you think about H&M‘s rise in the clothing retail?

Do you think it’s going to become Europe’s largest clothing retailer this year?

Tell us in the comments below and don’t forget to share it further!

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