Swedish fashion retailer Hennes & Mauritz AB's (HM-B.SK) sales fell in the fourth quarter in the face of declining visits to its stores and reflecting sluggishness in embracing a e-commerce.
Sales in the quarter ended Nov. 30, excluding value-added tax, fell 4% from a year earlier to 50.39 billion Swedish kronor ($6 billion). This was significantly below H&M's own expectations. Analysts polled by FactSet had expected SEK54.07 billion.
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H&M has lagged behind competitors in the move to online sales, and although its digitization process is now in full swing, accelerating online sales aren't fully compensating for reduced traffic at stores in several established markets.
"The quarter was weak for the H&M brand's physical stores, which were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry," H&M said.
The retailer said it is accelerating its ongoing transformation program, continuing the integration of physical and digital stores and intensifying the optimization of stores. This will lead to more store closures and fewer openings.
In a separate announcement Friday, H&M said it has extended its collaboration with Alibaba Group Holding Ltd.'s (BABA) Tmall e-commerce platform.
Currently, H&M's Monki brand is sold on the platform in China, but the latest amendment will see both the H&M and H&M Home brands launch next spring.
-Write to Dominic Chopping at email@example.com; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
December 15, 2017 03:07 ET (08:07 GMT)