H&M China Raises RMB 1.5 Billion To Accelerate Shops Last Year

Affected by the international financial crisis, the world’s third-largest fashion retailer and “fast fashion” leader Hennes & Mauritz (H&M)’s global sales increased by only 4% in fiscal 2009, but the Chinese market was “outshining” with an increase in sales. It ranks second in its global market, second only to Japan.

Affected by the international financial crisis, the world’s third-largest fashion retailer and “fast fashion” leader Hennes & Mauritz (H&M)’s global sales increased by only 4% in fiscal 2009, but the Chinese market was “outshining” with an increase in sales. It ranks second in its global market, second only to Japan.

H&M’s performance report for fiscal year 2009 (December 1, 2008 to November 30, 2009) released yesterday showed that the company achieved sales of 118.697 billion Swedish kronor (1 Swedish kronor and 0.94 yuan) for the whole year, after deducting exchange rate factors. Sales increased by 4% year-on-year. Loss of sales and management expenses, H&M's operating profit was SEK 21,644 million, a year-on-year increase of 7.5%, operating profit margin decreased from 22.7% in the previous year to 21.3%, and gross profit margin was 61.6%, which was basically the same as last year.

With regard to the lack of performance growth, H&M explained that it was dragged down by the international financial crisis. Consumer spending has contracted. In addition, clothing market discounting has become one of the main reasons for limited growth. As several of H&M’s major markets, H&M’s sales in France was SEK 8.455 billion, which was a year-on-year increase of 6%. However, in franc terms, sales decreased by 5% year-on-year; H&M US market sales decreased year-on-year in US dollars. At 3%, H&M's Spanish sales decreased by 2% year-on-year in local currencies.

Compared with the weak market in Europe and the United States, H&M's performance in the Chinese market is impressive. In the fiscal year of 2009, H&M's China market had sales of SEK 1,614 million, an increase of 83% year-on-year, and an increase of 51% in renminbi, second only to the Japanese market. During the same period, sales in the Japanese market soared from SEK 188 million in 2008 to SEK 11.11 billion, an increase of 461% year-on-year, and a 324% increase in yen.

In fiscal year 2009, H&M opened 275 new stores in the world. Excluding the closed 25 stores, there were 250 net shops opened throughout the year, including 14 new stores in the Chinese market. In the fiscal year of 2008, there were only 13 H&M stores in the domestic market. In FY09, the number of H&M's new stores opened in China was 1 times the number of original stores.

H&M said that it will add 240 franchise stores worldwide this year, and China will continue to be a key addition. However, it did not disclose that it will set up more stores in China. As of the end of November 2009, the company had opened 1988 stores worldwide.