The UK will be one of H&M’s top expansion markets in 2016 as the Swedish fast fashion chain pushes ahead with larger stores and mulls the launch of click-and-collect, chief financial officer Jyrki Tervonen has revealed.
The world’s second-biggest fashion retailer, which has 3,924 stores worldwide, said it plans to open a further 425 locations in 2016, “a lot” of which will be in the UK, though Tervonen declined to provide exact figures.
The UK is currently H&M’s third biggest market with 264 stores, behind Germany with 450 and the US with 415. During 2015 the group, which also owns five other fascias, Cos, & Other Stories, Cheap Monday, Monki and Weekday, opened 11 H&M stores in the UK.
It is focusing increasingly on opening larger stores - now an average of 16,000sq ft, up from 12,900sq ft a year ago - as it incorporates new product categories such as sportswear and beauty.
H&M is also considering rolling out click-and-collect in its UK stores after its UK site became the first to be re-platformed in December and it launched an online store in Ireland in 2016.
“We are still looking into click-and-collect. In the UK market we get a lot of questions about [this],” Tervonen said. “With everything there are pros and cons but we don’t want to get into that.”
Sales in the UK and Ireland have been “very strong” in recent months, according to Tervonen. “We are quite pleased with our development in the UK and very pleased with Ireland and still see a great deal of opportunities in those markets.”
H&M reported lower than expected profits for the fourth quarter of 2015. The company posted a pre-tax profit of SKr7.15bn (£577m) for the three months to November 30, 2015, lower than the SKr7.27bn (£586m) that had been expected.
The company said performance was impacted by unseasonably mild weather across Europe and North America in November. It warned that heavy discounting in order to shift leftover winter stock would impact its first quarter profits.
For the full year, H&M’s pre-tax profit rose 5% to SKr 27.2bn (£2.22bn). Sales including VAT were up 11% in local currencies.
Tervonen said the business hopes to be less weather-dependent in future seasons, but did not elaborate on how it would achieve this.
H&M opened a new distribution centre in Rugby, Warwickshire, last spring. A spokeswoman declined to give any further details.