Low Fashion Helps H&M Break Down The European Market

H&M is the world's second largest apparel retailer. Its quarterly profit as of June exceeded its previous estimate. Consumers who are suffering from financial constraints are eager to make themselves happy by buying cheap fashions.

H&M reports that its gross margin is stable, giving rise to long-term high expectations.

The prospect of the end of the price dragged on.

"Many countries are still facing a challenging macro-economic situation, and they should deal with tightening measures and restricting consumption."

H&M said we have strong sales in spring and summer, including soft colors and Hawaii style pretense.

The company continues to say: "H&M will continue to occupy the market share, even in challenging markets, this fact is a clear sign that H&M's strong product launch is recognized by consumers worldwide."

Because of the rising price of disposable income, rising wage increases and squeezed government cuts, many European retailers are still struggling, and confidence is disturbed by the sovereign debt crisis.

Because the emphasis is placed on

H&M and Inditex group are better than most other companies in terms of their wide geographical distribution, including some fast-growing emerging markets.

Persson, chief executive of H&M, said that the spring and summer series include pleated skirts and overalls for women's blouses. In all 44 markets, whether in big cities or small cities, countries with strong economic growth and countries with severe economic conditions are all being snapped up.

Analysts praised H&M's performance in two aspects of profit margins and operating costs, which are better than expected. They will continue to be optimistic about Inditex group.

Compared with last year's 5 billion 800 million kronor's pre tax profits, H&M said this year's pre tax profit reached 7 billion 100 million kronor from the second quarter of March to May.

Compared with the pressure of increasing costs to consumers, for example, cotton prices, the group preferred to adopt a constant price policy.

This helps the group occupy the market share and maximize the profit space.

However, H&M said,

The high impact has almost been offset, and the gross margin of 61.7% has been announced unchanged, exceeding the 61.1% of the public opinion forecast.

"This is obviously affected by the Asian cost price easing, and it is faster than expected.

I think things will get better in the next quarter. "

Sheng Fu securities analyst Daniel said.

H&M has about 2500 stores, and its main business is in Europe.

Through collaboration with well-known designers, H&M has tracked and adjusted sales. In recent years, H&M has expanded its core brand to new chain stores, following the Inditex group's practice.

The company is expanding in China, the United States and Russia, and plans to enter 5 new markets, which is optimistic about the prospects for further growth.