Swedish fashion retailer Hennes & Mauritz (H&M) posted a 40% increase in sales in the year to March 2023, still managing to retain its position as India’s largest fast fashion brand by revenues on lower pricing.
The sales expansion, however, was lower compared to 49% a year ago, indicating consumer shift to competition including Uniqlo and Zara. H&M posted sales at Rs 2960 crore during 2022-23, up from Rs 2115 crore in the year ago, according to its latest filing with the Registrar of Companies. Net profit surged 72% during the year to Rs43.6 crore.
During the fiscal, H&M’s online sales crossed Rs1000 crore mark, becoming one of the largest apparel brands online with revenues of Rs 1178 crore from ecommerce business, accounting for about 40% of its overall sales. A new logistics centre for online sales was put into operation in New Delhi in the beginning of the year, H&M said in its annual report recently.
H&M stocks fast fashion items created in-house and teams up with designers for one-time collections. It keeps a large inventory of basic, everyday items sourced from places including India and Bangladesh that carry lower price tags than those of most of its rivals.
Inditex Trent, its joint venture with Tata that runs 20 Zara stores in India, saw revenue expand 40% to Rs 2562.5 crore last fiscal, but it is six times more profitable than H&M. . Both Zara and H&M have been runaway successes in India since their arrival but Zara’s performance has been tapering off due to slow outlet expansion. Stockholm-based H&M, which opened a store a month in India on average since its entry in the country in October 2015, also saw its slowest expansion ever last fiscal when it opened less than five stores.
Sales in the organised retail segment grew 34% during FY22-23 compared to pre-pandemic (FY20), largely driven by quick service restaurants, sporting goods and electronics, according to a report by the Retailers Association of India (RAI).
As the world’s second most-populated country, India is an attractive market for apparel brands, especially with youngsters increasingly embracing western-style clothing. Companies such as Levi’s, Uniqlo and Celio are increasingly getting popular for functional basics like T-shirts and jeans, unlike fast-fashion rivals which are associated with designs that move quickly from the catwalk to the showroom. Earlier this month, Levi Strauss & Co president Michelle Gass said India is now the largest market for the San Francisco-based jeans maker within Asia and sixth largest globally.
