H&M marks the largest decline in profits for six years now

2018 is not a good year for H&M.

After the controversy and the racist accusations that marked the conclusion of the partnership with The Weeknd and the protests in South Africa, even on an economic level, it does not shine for its excellent performances.

In fact, in the financial statements closed on 30 November 2017 Hennes & Mauritz, even if its turnover increased by 4% to 231 billion crowns (about 23.7 billion euros), its profit fell to 16.2 billion (little over 2 billion euros) from 18.6. This is the largest decline in profits for the past six years.

As for stores, however, in 2018 will open about 390 new stores in places like Uruguay and Ukraine, but will close 170.

According to the group, the annual result was negatively impacted by the weak growth in sales at the brand's physical stores, mainly due to market transformations in which purchases are increasingly online.

So, to remedy the situation, the company plans to dedicate itself to e-commerce and expand its digital stores in four new markets such as India and, in franchising, Saudi Arabia and the United Arab Emirates.

"The fashion industry is changing fast. At the heart of the transformation is digitalization and it is driving the need to transform and re-think faster and faster"- said Karl-Johan Persson, CEO - "This is presenting many challenges, but we believe we are well-placed to adjust to the new dynamics and take advantage of the opportunities in front of us".

Another of the strategies adopted by the Swedish giant to stem losses is Afound: a multi-brand digital outlet that sells both the brands owned by the group and well-known Swedish and international brands of fashion and lifestyle. Although it will mainly live online, in March Afound will open the first store in Drottninggatan, Stockholm.