Sales may have dropped for H&M, but the group is in a strong position. Image: David Thunander
The latest full year report for the year ending November 2020 from H&M shows the impact Covid-19 has had, with sales dropping by 18% and gross profit falling by 88%.
“The H&M group stands strong after all the challenges brought by the pandemic. Thanks to much appreciated collections, rapid and profitable online growth and strict cost control, the company succeeded in ending the year in profit and in a strong financial position,” says Helena Helmersson, CEO.
The recent years’ transformation initiatives and investments, focusing on the digital have been especially important for managing the crisis and this work is continuing at full speed for the group. Online and physical stores are being increasingly integrated, with continued optimisation of the store portfolio. Around 100 new stores are planned to open in 2021, while 350 stores are planned to close in the same period - mainly in established markets.
“Customers want to meet us where, when and how they choose – in the stores, on our websites, on digital marketplaces and on social media,” says Helena. “They are showing us clearly that they appreciate a convenient and inspiring experience in which the channels interact and strengthen each other. We are continuing our initiatives for digital growth, integration of the channels and optimisation of the store portfolio. Speed and flexibility will be even more important going forward, particularly in the supply chain, to ensure the best customer offering and increase availability in all channels.”
One of the highlights picked out in the annual report was the group’s sustainability vision. The H&M group’s aim is to shift from virgin to recycled materials, with the goal of using 100 percent recycled or other sustainably sourced materials by 2030. Recycled materials are a limited resource and the group will use its size to increase the speed of the transition away from virgin materials, without causing harm in doing so. New technologies must be enhanced and scaled, and new materials must replace the old ones. To accelerate the use of recycled materials the H&M group has set a new target to reach 30 percent recycled materials by 2025.
“Our key focus remains on developing strong, unique brands in order to always offer the best combination of fashion, quality, price and sustainability. The percentage of recycled and sustainable materials in the collections is consistently increasing and our brands are offering an ever-growing range of services for a more sustainable lifestyle. Together with our transformation initiatives this will help increase our resilience and adaptability and will contribute to sustainable and profitable growth for the H&M group,” says Helena.