With like-for-like sales falling at H&M yet again, Victoria Gallagher wonders whether it’s time to ask if the H&M bubble has burst.
For years it seemed that Swedish fast fashion retailer H&M could do no wrong, posting soaring sales while frequently launching designer collaborations that had fashionistas queuing round the block.
However over these last few months there has been a slowdown in sales, with the latest disappointing results blamed on the unseasonably cold weather across Europe.
Of course the weather has been a huge factor in retailers’ spring sales, but the dip in H&M’s revenues has made it apparent that H&M is not as nimble as perhaps people thought it once was.
The product may be cheap and on trend, but the high street giant may need to re-examine its supply base to ensure it can react quickly to adverse weather.
It manufactures across both Asia and India and admits that lead-time can vary from a couple of weeks to six months.Perhaps with sales struggling, now is the time to consider moving more production closer to home to give it more opportunity to react quickly.
While listening to brands speak at our Drapers Brand Market Report round table last week, it was more apparent than ever that product is king. If the product is right then no matter what the economic situation is or how bad the weather is, shoppers will just buy it.
H&M seems to have been slightly off the mark with its product for this season - as illustrated by Drapers’ Hit or Miss features. Despite covering trends from tropical prints to sci-fi galaxy patterns H&M’s expanse volume and breadth giving impression of a lack of focus.
I fear that H&M may be trying to stretch itself by trying to appeal to everyone instead of focusing on its core customer - younger customers looking for a low priced fashion fix.
Recent results may well be a temporary blip, but like all other retailers being buffeted by strong headwinds, it must refocus its proposition and re-inject a little bit more excitement to get shoppers coming back through the doors.