H&M targets 300 more new stores

H&MFashion chain H&M has vowed to step up its expansion by targeting more than 300 new stores this year.

The pledge came even though higher costs and investment in a new brand resulted in a slight dip in its fourth quarter profits to 5.29 billion kronor (£524.2 million).
Stockholm-based H&M, which recently unveiled & Other Stories as a new fascia for the business, is planning the net addition of 325 stores this year, with the highest rate of expansion in China and the United States.

This compares with the opening of 339 stores and closure of 35 during the last financial year to November 30, giving a net addition of 304. It had originally planned to open 275 outlets.

Chief executive Karl-Johan Persson said H&M "stands strong" in a challenging clothing market which in many countries was tougher in 2012 than in 2011.

He said an 11% increase in sales in local currencies in the last financial year - up by 1% on a same-store basis - proved that customers "appreciate our collections". Group profits for the year rose 7% to 16.87 billion kronor (£1.67 billion).

Mr Persson said long-term investments in areas such as online shopping and the launch of & Other Stories, which includes a store on London's Regent Street, weighed on fourth quarter results.

The chain currently has more than 200 of its 2,800 stores in the UK and employs in excess of 104,000 people. It will open stores in Chile, Estonia, Lithuania, Serbia and Indonesia for the first time this year.

Mr Persson added: "We are looking forward to an exciting 2013 full of opportunities.

"We have the greatest respect for the macro-economic climate and how it may affect the consumption in many of our markets, but we have a strong belief in our offering and are convinced that H&M will continue to maintain its strong position."

High Street casualties
See Gallery
H&M targets 300 more new stores

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.


More stories
Read Full Story