H&M released its Q4 and year-end results this morning, and the Swedish fast fashion retailer’s fourth quarter profits were up 6 percent from 2012 — a net profit of roughly $871 million — but missed analysts’ estimates because of discounted prices, a play at staying competitive this winter. Sales in January are expected to increase by 15 percent, compared to the same time last year.
Meanwhile, the retailer is staying aggressive with opening new stores. Although H&M is working on its e-commerce game, proliferating its physical locations is a major area of investment. The retailer’s aim is to increase the number of brick-and-mortar spaces by 10 to 15 percent each year, both internationally and in the countries where it is already well-established.
H&M opened 356 stores this year, the U.S. and China being its largest markets for expansion, and the retailer is slated to open another 375 in 2014, again mostly in the U.S. and China. International expansion is already planned for Australia and the Philippines, with a few other (currently unnamed) markets opening toward the end of the year — the report did, however, cite Russia, Germany, Italy and Poland as good opportunities for expansion. A South African debut is slated for 2015.
Similarly, H&M is expanding the footprint of its other brands, which include COS, Cheap Monday, & Other Stories, Weekday, Monki and H&M Home. As we learned back in September, the higher-end COS will be opening its first U.S. store in SoHo this year.
Given the speed with which it’s opening offline locations, the retailer clearly has its brick-and-mortar supply chain worked out; delivering e-commerce to new markets is taking the retailer much longer. After finally bringing e-commerce to the U.S. this summer after numerous delays, the retailer is continuing to expand its online capability internationally. France’s site goes live for spring/summer and “an additional three large online markets” will launch later in 2014.