Swedish fashion retailer Hennes & Mauritz AB (H&M) said it is increasing markdowns this quarter after accumulating a record pile of unsold garments worth more than US$4 billion.
Operating profit fell 62 percent to the lowest level in 16 years as inventory rose to 17.6 percent of sales in the first quarter. The stock slumped to the lowest in almost a decade.
“The worrying sign again comes from unabated piling-up of inventory,” Bloomberg Intelligence analyst Chris Chaviaras said.
H&M’s already downbeat forecast for the start of this year was exacerbated by unseasonably warm European weather in January followed by last month’s cold snap, whipsawing the clothing retail industry.
That forced the company to slash prices even more to try to clear inventory.
Chief executive officer Karl-Johan Persson yesterday said the company made mistakes by narrowing its assortment last year, although he expects sales to improve in the second half of this year.
The shares traded 4.1 percent lower at 122.1 kronor as of 9:33am in Stockholm.
H&M plans to reduce markdowns in the second half, when sales should improve, Persson said.
He forecast that the retailer will reduce inventory to 12 to 14 percent of sales next year.
“We haven’t improved fast enough,” said the billionaire chief executive officer, 43. “We’re working hard to fix that.”
The retailer is adding a new brand called Afound to sell clothes from various brands, including H&M at a discount, and it is adding three automated logistics centers this year to speed up deliveries.
H&M last month forecast sales in comparable stores to drop this year before returning to growth in fiscal 2019.
“The next 12 to 18 months will be challenging,” Barclays PLC analyst Alvira Rao wrote, adding that the initiatives might not be enough to keep up with increasing competition.
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS