H&M launches new brands while cutting down physical store openings

It hasn’t been an easy start to 2018 for fashion retailer H&M. After the PR fiasco, the Swedish brand said that in 2018, it will open lesser stores as more consumers shift to shopping online. According to H&M CEO Karl-Johan Persson, this was because the brand’s 2017 performance was “mixed”. But going forward, it will also be banking on creating new brands.“We now have eight brands that are all scalable – and we will soon launch our ninth brand, Afound,” said Persson. He added,  “We constantly work on new ideas and innovations that will drive us forward – and there are many in our pipeline for 2018 and the years to come.”He added that as the brand’s digital expansion accelerates, the group will also roll out digital to new markets and linking to new platforms, like Tmall for mainland China. He added that the digital process "should never settle and be constantly improved and broadened" to ensure it maximises engagement and sales."We are integrating our physical and digital stores to offer our customers a great shopping experience with services ranging from Click and Collect to Scan and Buy and online returns in store,” he said.Last year, while H&M’s online sales and newer brands performed well, the physical stores took a hit with reduced footfall. Overall the brand delivered growth of 3% in 2017, which was clearly below its expectations. In the fourth quarter, H&M’s sales overall decreased by 2% in local currencies.According to a report on CNBC, H&M has planned a net addition of about 220 stores in 2018, compared with 388 in 2017. This comes as H&M plans to open about 390 new stores and close about 170, entering Uruguay and Ukraine for the first time, said the report.Going forward, the group also aims to invest more in analytics and intelligence and further build on its tech foundation. This includes building scalable, robust platforms; faster development of consumer-facing apps; and broadening its use of technologies like Cloud, RFID and 3D.Recently, the brand revealed that it would be appointing Annie Wu to lead the global diversity mandate for its organisation. The move followed major backlash the brand received last week for clothing one of its black child models in a green hoodie that said “Coolest monkey in the jungle”.