Swedish fashion group H&M’s profit before tax for the first 3 months of the year fell 60% year-on-year to a 16-year low, due to poor sales and more discounts.
“The situation at the beginning of the year was quite difficult,” said CEO Karl-Johan Persson. According to him, the company often has to hold big discounts to clear the inventory (clearance sale) while the unusually cold February weather prevents customers from buying spring clothes.
Shares fell 3.8% following a warning that discounts would be even higher as unsold sales hit record levels – more than $ 4 billion.
The retailer is adding a new brand called Afound to sell clothes from various brands, including discounted H&M products, and three more automated logistics centers this year to quickly move to store. H&M has also started selling online in India and China.
Ho page / Financial Times / Bloomberg
* Source: Partner