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Despite a series of widespread price cuts, chain apparel chain H&M is trying to sell an additional $4 billion in merchandise – including several months of Cheap Halloween Costumes and Christmas sweaters – as consumer tastes are constantly changing and the competition is fierce, Swedish retail The business paid the price.

The company has been a darling of fast fashion for years and he says it cannot convince customers to buy clothes. H&M parent company Hennes & Mauritz said on Tuesday that sales are declining, profits have fallen to the lowest level in 16 years, and inventory has increased. The stock of the retailer fell about 6.8% on Tuesday to the lowest level since 2005.

H&M Chief Executive Officer Karl-John Persson said in a statement: “The rapid transformation of the fashion retail industry continues. “This year’s start is very difficult. The sluggish sales, together with the significant price cuts, have had a significant negative impact on the first quarter’s results. “

Analysts said that a series of factors led to H&M’s troubles. The main one is that Millennials are growing up, and they are more interested in buying well-made clothes than buying cheap ones. According to Milton Pedraza, chief executive of the New York City Institute of Luxury Studies, companies such as Zara, Topshop, Uniqlo and Asos are more competitive – all of these customers tend to be associated with higher quality clothing and better websites. Research company.

“The Millennials are looking for quality over quantity, which means they no longer need disposable products,” Pedraza said. “They don’t care about fashion, but more about classics and quality, and neither of these is what H&M can achieve.”

Analysts said that the recent response from H&M’s advertisements showed that a black child wearing a “coolest monkey in the jungle” sweatshirt might also hurt sales. After the January incident, the client was widely called for boycott. The musicians The Weeknd and G-Eazy established a cooperative relationship with the retailer and announced that they would sever their relationship with the company.

“Regardless of whether or not to ignore neglect, the real grief of 2018 and the disturbing point is that the eyes of many people (stylists, photographers, creative and marketing teams) transmit such ethnically and culturally insensitive things and are considered to be Acceptable,” G-Eazy wrote on Instagram. “I can’t associate my name and brand with a company that could make this happen.”

H&M later apologized for the advertisement, but some people in the industry stated that the company may feel far-reaching influence.

“Especially in places like South Africa, there is a huge rebound, which may make some customers say: ‘You know what? Anyway, I’m not loyal to H&M. Maybe I’ll go shopping elsewhere,’” Cornell University Professor of Fashion Design Management Tasha Lewis said.

In the most recent quarter, H&M said that inventory has increased by 7% to a record $4 billion. On Tuesday, the company’s website promoted “a further price reduction of up to 70%.” Obviously many projects have passed for months: Halloween-themed T-shirts sell for $3.99, while babies’ Santa costumes cost $4.99.

As consumers increasingly shop online and look for more unique clothing startups, overstocking has plagued the troubles of some traditional retailers in recent years. Several chain stores, including Macy’s, Cole, and Nordstrom, had reduced inventory during the holiday season last year, hoping to avoid offering large discounts on the remaining goods. The plan seems to have worked: retailers have performed most successfully during the holiday season, and many people say they do not have to resort to substantial price cuts.

“We maintain a healthy inventory, which means we don’t need extra discounts to clean up inventory,” said Macy’s CEO Jeffrey Genette on a recent call with analysts. “Our promotions have been disciplined.”

However, this is not the case with H&M. As the world’s second-largest clothing retailer (owned by Zara’s Inditex), analysts said the company is particularly vulnerable to consumer interest. H&M’s quarterly sales began to decline at the end of last year.

Andreas Inderst, an analyst at the Macquarie Group in London, said: “Customers expect great conflicts with the products delivered by the company. “This is an industry-wide issue, but for H&M, it has become a Particularly noticeable problems. ”

At the same time, company executives said they plan to further discount in the second quarter because they want to reverse H&M’s business. The company is also preparing to launch a “cheap market” called Afound, which will sell H&M and other brand discounts.


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