But the tide has begun to turn for the world’s second-largest clothing retailer. Over the last two years, it has increasingly lost out to more fashionable rivals like Zara at the same time it has been outsmarted by online-centric stores, such as ASOS, that have cut down supply chains to as little as a week.
These pressures are showing up in the company’s earnings. Sales growth at H&M started to falter in 2016, culminating in its biggest sales slump on record in the last quarter of 2017. Its share price slumped, and key investors began selling off stock.
On Tuesday, in the company’s most recent earnings results, the grandson of the company’s founder and its current CEO, Karl-Johan Persson, acknowledged H&M’s troubles but left investors wondering what exactly management is doing to resolve them.
“The start of the year has been tough,” he said. “2018 is a transitional year for the H&M group, as we accelerate our transformation so that we can take advantage of the opportunities generated by rapid digitalization.”