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H&M's Problems Won't Be Solved By Growing Online Sales

What changed? H&M isn’t immune to the migration of apparel sales to online, a change that has hurt mall and store traffic and led to the bankruptcies of specialty apparel retailers from Aeropostale to Wet Seal. The online shift also has broadened the number of H&M’s competitors. For one, just look at the fashion ambition of well-resourced online giant Amazon. “Most of fashion retail is changing rapidly,” H&M CEO Karl-Johan Persson said on a conference call Wednesday. “At the heart of this development is digitalization. … The competitive landscape is being redrawn.” H&M is fast expanding and catching up online. This year, it will open its own or franchised online stores in four additional markets from India to Saudi Arabia, on top of 43 others where it already has an ecommerce presence. In March, its flagship brand will debut for sale on Alibaba’s Tmall platform in China. H&M is also integrating its physical and online stores by offering services such as online order for in-store pickup and online returns in stores. However, some competitors look to be moving even faster.

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