H&M hopes Alibaba can help it catch up online

H&M is betting big on China as it races to catch up to more nimble online competitors.The world's second large...

Posted: Jan. 31, 2018 11:45 AM
Updated: Jan. 31, 2018 11:45 AM

H&M is betting big on China as it races to catch up to more nimble online competitors.

The world's second largest fashion retailer acknowledged Wednesday that it's struggling to keep pace with evolving shopping habits that have depressed sales in its physical stores.

H&M shares dropped over 7% in Sweden after the company said that sales grew 4% in 2017, but profit after taxes slumped 13%.

CEO Karl-Johan Persson said in a statement that the fashion industry is "changing fast."

"At the heart of the transformation is digitalization, and it is driving the need to transform and rethink faster and faster," he said.

H&M currently has an online presence in 43 markets, but physical stores in 69.

The company is now hoping to make inroads in China, where it will launch a store on Tmall in March. Alibaba's retail platform is one of the biggest in Asia, with the potential to reach hundreds of millions of customers.

H&M said Wednesday that it also plans to open digital stores this year in India, Saudi Arabia and the United Arab Emirates.

Related: H&M apologizes for using black child to sell 'coolest monkey' top

"While H&M was once a pioneer it now looks like the company has failed to keep up," said Pedro Aguilar, an analyst at market research firm Euromonitor International.

He said younger, more agile fashion companies like ASOS and boohoo have managed to deliver a much better online customer experience.

Euromonitor data show that 16% of global apparel and footwear sales were generated online in 2017. In Asia Pacific, a key market for H&M, the figure was 21%.

Article Comments

Mason City
Overcast
32° wxIcon
Hi: 44° Lo: 27°
Feels Like: 19°
Albert Lea
Overcast
30° wxIcon
Hi: 43° Lo: 26°
Feels Like: 20°
Austin
Overcast
32° wxIcon
Hi: 44° Lo: 27°
Feels Like: 20°
Charles City
Overcast
34° wxIcon
Hi: 44° Lo: 28°
Feels Like: 22°
Rochester
Overcast
33° wxIcon
Hi: 42° Lo: 27°
Feels Like: 22°
We're tracking accumulating snowfall for Friday night
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Women discuss election wins and losses

Image

Dream season comes to an end

Image

Mobile breast exam clinic

Image

Warriors welcomed home

Image

Legal clinic for sexual assault survivors

Image

Rise above Islamophobia

Image

John Adams PTSA meeting postponed

Image

James Betz signing

Image

Rockford wraps up dream season

Image

Great American Smokeout

Community Events