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H&M has slept through the step to the Internet

On 3. January 2019 to remain closed the doors to the chapel lane 11 in Lucerne, Switzerland. Despite a Prime location and plenty of walk-in customers: Almost forty years after the opening of H&M on the branch in the old town. The Swedish fashion group wants to go "new ways" as he writes. Where they lead, is unclear.

As in many countries, the traditional dress business is shrinking in Switzerland: 2018 sales in the stores fell, according to market research firm GfK in 9 per cent, while the retail trade increased slightly overall. Including not only small stores but also increasingly well-known providers suffer.

Shrinking sales

The store closing in Lucerne is at H&M is not an isolated case. In the current year, the Swedes want to close the world a further 160 sales. Although the group was able to increase sales in 2018, again, the operating profit margin stands but has long been under pressure. This is reflected in the share price.

This is symptomatic for the development of the past few years: Just in the dress business of selling over the Internet is becoming more and more important. According to an estimate by Credit Suisse, the online retailer Zalando is expected to come in this country, in the meantime a market share of 10 percent. This weighs on the prices.

H&M and other major clothing chains, such as the Spanish Inditex, with the well known fashion houses such as Zara and Massimo Dutti, does not come in the Internet against the shipping giant. Critics say they have slept through the step into online business. So as not to be wrong: In the summer of 2013, Sweden opened up their first online shop. Since Zalando was already five years.

a Decline in the margins

Amazon and service providers such as Netflix, according to have changed to a study by the consulting firm McKinsey, the expectations of the customers. They want to now keep not only food and books, but also clothes and jewelry, a few hours after the order is placed in the hands. That requires millions of investment in logistics and the conversion of entire supply chains.

, also, the Fashion. There used to be four seasons per year, the offer today. The average fashion cycle from introduction to closeout may take about six weeks. The H&M has become in the past few years, fatal. Since 2014, the value of the constant has dresses bought doubled to 4.1 billion Swiss francs, almost.

Who can respond faster to fashion trends, in this market an advantage. Inditex has realized that early on. Therefore, nearly 60 percent of the substances, except in Spain are fabricated in countries such as Tunisia and Morocco. Since 2013, the company has increased its turnover by half. But also the profitability of the Spaniard was the last to decline. The shares have lost since the middle of 2017, a third.

Not only in the middle price segment, manufacturers are under pressure. The cheap fashion from Primark comes in the increasingly price-sensitive customers, the parent company, Associated British Foods earned significantly less than.

luxury it hard

expressed a Little less effort, luxury brands such as French Luxury or Italian Moncler. The growth in this Segment is more dependent on China. With the slowdown in the consumer sentiment in the people's Republic, however, came back the shares. At best it currently runs sports dress manufacturers.

For the challenges in the industry seems to Inditex currently better placed than H&M and Primark. With a price-to-earnings ratio of 22 for 2019, the titles are historically low, the potential is limited. The reviews of the Kering and Moncler have returned to normal somewhat recently, given the economic uncertainty in China, a start is not Intrusive.

The Trends in demand and sometimes prominent victims: The German fashion group Gerry Weber has requested by the end of January, the bankruptcy. About the shop in Lucerne's old town, a new sign: The sport emblazoned in the meantime, retailer, Ochsner Sport has set on the three floors.

(financial and economic)

Created: 08.02.2019, 14:56 PM

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