H&M Group's CEO, Helena Helmersson, says the retail giant plans to double its revenues by investing in the resale market.
Following its full-year trading update earlier today (28 February), H&M Group has revealed plans to double its revenue by 2030 and halve its carbon footprint across its supply chain. It also expects profitability to grow by 10% over time.
Group net sales, when converted into Swedish crowns, increased by 6% to SEK198.9bn (£15.8bn) in the 12 months to 30 November 2021, compared to the prior year, as sales bounced back from the pandemic. Gross profit at H&M Group, which comprises which includes Cos, & Other Stories, H&M and Weekday, increased by 12% year on year to SEK105bn (£8.3bn) in the same period.
“We are a growth company; it is in our DNA," H&M Group CEO, Helena Helmersson, said. "After two turbulent years we are in a healthy financial position and [as a result, we are] focusing on this [growth journey] again."
She said the group wants to double in revenues by 2030: “When we say doubling sales, we don’t mean doubling [the] volume [of sales]. but [doubling] revenue." H&M Group plans to invest in resale to drive sales, by being able to sell items to customers more than once.
“We have integrated plans [to drive more] circularity," Helmersson said. "We have seen that resale is on the rise - more and more customers want to buy second hand."
From February, in partnership with Sellpy, a resale platform which H&M Group has majority ownership of, the H&M brand will start to offer a selection of second-hand products. It will first be rolled out in Sweden, and later in Germany.
“When we connect Sellpy with H&M.com, products can have a longer life," Helmersson said. "There can be more than one transaction for one product."
Meanwhile, the group has planned to invest SEK3bn (£240m) in more sustainable materials and manufacturing methods, to help it reach its target of halving its carbon emissions across the supply chain, to “gradually phase out carbon from the supply chain” by 2030.
Another aspect of the group's growth plans will be to continue to "optimise" its store network. The group plans to open around 120 new stores, and close 240 stores, representing a net decrease of 120. The majority of closures are expected to take place within Europe, Helmersson said.
The CEO explained that store closures are a result of the retailer’s plans to keep up with changing customer needs and to integrate the in-store and online customer experience: “Historically, [growth was based on] growing the number of stores. That concept has changed because customer behaviour's have changed. The advantage we have is that we have a physical footprint and can engage with customers physically and digitally.”
Helmersson said the store closures will not stop the group from entering into new territories. In its 2021 full year results, the retailer detailed that, in 2022, H&M will launch in six new markets with stores to open in Ecuador, Kosovo and North Macedonia. It will also launch stores, through a franchise model, in Costa Rica, Guatemala and Cambodia.
“When we say [we will reach a] net minus of 120 [stores in 2022] it will be in countries that we have been in for a very long time, mainly in Europe," Helmersson said. "[However, our store] target will evolve where we see potential. There is still great potential outside Europe to grow further.
“Our growth plan is something we will work on continuously. We follow customer behaviour. The most important part of this is that we listen to the customer and understand how to play with physical [retail] versus digital and how we integrate those. We will never stop developing the customer experience.
“We need to think less of growth as it has been. Now, it is about [having] a physical space and digital presence and [looking at] how they interact.”
While the retailer said its growth plans are “ambitious”. the CEO detailed that the group is confident it will meet expectations: “We have respect for the aftermath of the challenges of pandemic. [However, the situation has shown that] we are able to quickly adapt and [take advantage] of the opportunities that arise."
Original Article: H&M's CEO reveals plans to double sales by 2030 (drapersonline.com)