Logistics problems impact on H&M’s profit


Logistics problems at the Swedish fashion retailer H&M contributed to a 22 percent drop in net profit in the second quarter of this year. H&M’s profit has now fallen for four consecutive quarters. Another factor is the retailer’s ongoing difficulty in adjusting to e-tailing.

H&M is struggling to get to grips with a new logistics system, according to a report in the Dutch financial newspaper FD. The system was introduced to get products into stores faster, but the newspaper claims that the Swedish retailer has so far failed in that respect. Inventory is piling up because the system is not yet working properly.

H&M has indicated that the problems are primarily focused in key markets such as the USA, France, Italy and Belgium. As a result, online sales have come under pressure in the Nordic countries. H&M has been forced to reduce its prices in order to sell the stock.

Transition to online

Additionally, H&M is struggling to make the transition to selling its clothing online. Nevertheless, the retailer says that things are now moving in the right direction. CEO Karl-Johan Persson recently expressed his confidence that H&M will deliver better results in the second half of this year.

Source: FD