Online shopping is where profits are found
The Short Version
Forbes magazine is reporting that fast-fashion retailer H&M is going to start closing under-performing stores and is abandoning its goal of opening 10-15% new stores each year. The chain is moving to put more emphasis on online shopping as it continues to chase a younger demographic that doesn’t shop in stores.
A Bit More Detail
No, your favorite H&M store isn’t going to close tomorrow. Probably. Maybe. Unless it’s one that has been defined as “under-performing.” For now, those are the only stores on the chopping block. The majority of stores in the US and Europe will keep right on putting out the fashion as fast as those factories in Bangladesh and Turkey can churn them out.
For now.
However, H&M’s CEO Karl-Johan Persson has changed his mind about the company’s growth strategy, away from physical stores in Europe and the US and more toward online sales. The reasons are numerous. In posting a six percent increase in sales last year, net income actually dropped almost eleven percent, largely because of increased markdowns necessary to stay competitive. Persson also said that events such as terror attacks and Brexit are creating problems in certain areas of the world.
The move toward a more online strategy isn’t universal, however. Persson says that emerging markets such as India, Mexico, South Africa, and Turkey are growing and will see more stores open. In fact, 430 stores will open this year, including new entry into Kazakhstan, Colombia, The Republic of Georgia, and Taiwan.
As H&M grows its online presence, it looks directly at competing with Amazon, Zalandro, and Alibaba, hoping to capitalize off its online/brick-and-mortar combination. The company still expects a 10-15% annual sales increase despite the shift in focus. They are also expanding their online presence, adding Malaysia, Mexico, Hong Kong, Singapore, Taiwan, and Turkey to the list of cyber markets.
The move by H&M is important in light of the continued struggles that have plagued mall-based retailers over the past several years. Rumors that Hudson’s Bay, who already owns Saks, is making a takeover move on troubled department store Macy’s was greeted with considerable optimism. Traditional fashion retailers are struggling and brick-and-mortar stores are a large cost factor that yields little, if any, profit.
Fast-fashion retailers, such as H&M and Forever21, have been seen as the exception to the decline of retail fashion stores. Where others have failed, fast-fashion outlets have been booming, for the most part. H&M’s change in strategy seems to signal the popping of that bubble.
Again, H&M emphasizes that only under-performing stores are going to close. However, there was no detail defining “under-performing” and whether that might expand should on-line sales beat sales goals. We only know that once a store is targeted for closure, that the door-shuttering will happen quickly. Don’t expect a lot of huge clearance sales.
We also don’t know how this might effect H&M’s partnerships with fashion brands such as Kenzo and its relationships with designers, things that have made the store popular in the past.
What we do know is that this could be a serious blow to real estate and mall developers in the long-term. Any hope for a resurgence based on fast-fashion growth would appear to be crushed. As Amazon and other companies look at faster and cheaper delivery methods, the days of physical in-store shopping look to be shorter than previously anticipated.
At the same time, this move makes the opportunities for smaller boutiques that much stronger. Located in more urban areas in places where storefront rents are not quite so expensive, boutiques counter the online trend with a more intimate shopping experience. As bigger brands drop physical stores to move online, boutique owners are likely to see an increase in traffic, especially from shoppers over 40 who still like to touch and try on clothes before buying.
Either way one looks at the situation, however, the consumer almost certainly comes out the winner.
Morning Update: 04/20/24
If you’re not celebrating today, or at least thinking about celebrating if you’re not physically able, then can you really be my friend? Of course, I can’t partake, either. Not only is it not legal in Indiana [insert stifled guffaw here] it can interfere with my meds. There are some edibles that I can tolerate, but since Kat’s not here for the weekend I’ll have to make do with coffee. 😪 We have to give up some of the best things because of cancer. I’m not liking that part at all. I guess if I wanted to give up something this would be the time to do it. But I’m too old goddammit. Now’s the time to be indulging in all the pleasures we’ve put off earlier in our lives. No one over 60 should have to say no to any form of pleasure. If it kills us, at least we went out doing something fun instead of lying in a hospital strapped to tubes.
I tried to get a lot done yesterday, but it didn’t happen at the rate I wanted. Part of that was because I couldn’t get the pictures to do what I wanted. There are times when even the best technology available isn’t sufficient to read my mind and deliver the image my brain is seeing. After a couple of hours of arguing with Adobe over what is and isn’t a violation of the terms of service, I just gave up. So help me, their censors are apparently offended by people having a chest at all.
Just in case you missed them, though, we posted the following articles yesterday:
I mean, we try to be entertaining even when we’re feeling like whatever that was the cat just threw up on the floor. We want to give you something to do besides playing with that tear in your underwear; you’re only going to make it worse.
We investigated more apartments yesterday but came up empty. Too many listings don’t tell you if all utilities are paid. I’m assuming if they don’t mention it, they’re not. There are also far too many listings for studio apartments that are two or three times what I make in a month! WHAT THE LIVING FUCK! That doesn’t make sense for any apartment, I don’t care where it’s located or what amenities are included. And at that price, someone had better be bringing me breakfast each morning. Ya’ll are kinda stupid if you’re paying that much. Seriously! What a fucking waste of income!
One of the issues that I can’t seem to get past is the fact that once I take the chemo meds, I have a little less than two hours before I’m dead asleep. This does not make me happy. I have to take the meds with breakfast. I can only put off breakfast for so long before my body starts to complain. The hungrier I am when I eat, the shorter period I have after taking the meds before I’m completely knocked out. This drives me nuts because midmorning is one of the best times of day to get things done and where am I? In bed, surrounded by these two dogs, as sound asleep as if it were the middle of the night. Trying to juggle the timing so that I can get things done is unnerving.
Oh, here’s the ridiculously stupid headline of the day: Woman Who Didn’t Get Raptured Demands a Refund on Her Generous Tips. There’s stupid, and then there’s “Oh my god, do you even have a brain.” This certainly falls into the latter category. I can’t imagine ever going back and asking a server to return all or a portion of a tip you’d left. Just how fucking brain-dead does a person have to be to do something like that?
If I had limitless income, which I don’t, I would buy every woman on the planet a copy of Wonder Woman #8, the issue where Wonder Woman is under the influence of a religious (Christian) nut job. It’s only 30 pages, extremely well illustrated, and easy to read. My hope would be that women with religious assholes for husbands would find themselves in this story and find their own path to escaping the mind games men and churches use to keep them bound in marital slavery where they’re not respected or valued as anything more than property. If you know someone who is in this trap, maybe buy them a copy and slip it to them in between the pages of the Bible they’re forced to read. Consider it a mission of mercy.
Okay. I really need to eat now. Ugh. Check back with me after I wake up this afternoon.
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