PARIS – Rabanne was not enough of a boost for H&M.
Swedish fast-fashion retailer H&M saw its Q4 sales slip 4 percent in local currencies year-over-year.
Sales remained flat in Swedish kroner compared to the same period last year, for a total of 62.6 billion kronor, or 5.56 billion euros, in the three month period of Sept. 1 to Nov. 30. That number is steadied by the weak Swedish currency, which hit a record low against the euro in September.
The successful collaboration with French house Rabanne, which sold out within a few hours and saw eager customers line up in anticipation outside of London and Paris stores, was released in the fourth quarter, dropping on Nov. 14 with a splashy party in Paris to celebrate. It is the latest in H&M’s high-profile collaboration strategy, which included the popular Mugler collection earlier this year.
In the battle of the behemoths, the latest sales results show H&M is falling behind Zara parent company Inditex, which reported a third-quarter sales bump of 6.6 percent to 8.8 billion euros in the three months to the end of October, and an 11 percent gain so far in the fourth quarter to Dec. 11 as the holiday shopping season got off to a strong start.
The comparison suggests that Chinese online fashion retailer Shein is taking a bigger bite out of H&M’s sales than it is of rival Zara, which has taken steps to upscale its offerings and image since Marta Ortega Pérez took over as non-executive chair at Inditex, overseeing the high-street brand’s direction.
H&M’s slight price increases may have dented its sales numbers, said RBC analyst Richard Chamberlain.
“Industry data implies that H&M has been losing volume share during the period, as we think it has been raising prices more this season, having been slow to raise them last year,” Chamberlain wrote in a note following the release. “H&M is very much in ‘trading sales for profits’ mode which is leading to margin improvement but some pressure on volumes. As such we think it may have to reinvest sourcing gains at some point to drive volume as it appears to be losing some [like-for-like] share in major markets.”
H&M Group also operates brands Arket, COS, Monki, Weekday, & Other Stories, Cheap Monday and H&M Home.
Looking at the full fiscal year through the end of November, the group’s net sales increased by 6 percent to 236 billion Swedish kroner, or 20.96 billion euros.
H&M has been undertaking a stock buyback program announced at the end of September, snapping up 3 billion Swedish kronor of its own shares.
H&M’s full year results will be revealed Jan. 31, 2024.
