H&M'S COS Shop Will Never Stop.

After a period of crazy expansion, there is a comparative analysis of Spain.

brand

The parent company Inditex, Sweden is fast fashion.

The group is now in the bottleneck of performance.

According to the world clothing and shoe net, in the first half of May 31st, sales of H&M group (STO: HM) increased 9% to 113 billion 900 million Swedish Swedish dollar 13 billion 260 million, while net profit increased 5.7% to 8 billion 350 million Swedish Swedish dollar.

According to financial reports, H&M's net profit increased by 10% to 5 billion 900 million grams in the second quarter, thanks to the expansion of stores and the growth of online sales. It exceeded the market expectations, and sales also increased 10% to 59 billion 538 million Swedish Swedish $6 billion 980 million, but the gross margin was further reduced to 57.1% compared with the same period last year 57.6%.

H&M group owns six brands including H&M, COS, Monki, Weekday, &Other Stories and Cheap Monday, and will add another brand Arket at the end of this year.

The report shows that H&M group still has great expectations for the COS brand, which is expected to reach $1 billion 170 million in Sweden's 10 billion Swedish clanger this year, and has the potential to become the group's second largest brand except H&M.

The COS brand opened its first flagship store in Regent street, London, in March 2007.

And in just a few years, it has attracted rapid attention in the fashion industry and consumption boom. According to the fashion headline data, the brand expands with the average annual opening of 22 stores.

According to the relevant data, sales of COS grew rapidly. From 2009 to 2014, the sales volume of COS increased from $132 million to $625 million, and nearly 5 times that of COS.

It is noteworthy that, as the H&M group's high priced medium sized minimalist brand COS, the profitability is amazing. Earlier data showed that the single day profit of COS London single store has surpassed all the H&M shops in the same city.

By Region:

China became the most significant market for H&M group in the first half of the year, and sales rose 12% to SEK 5 billion 730 million.

Germany sales of H&M group's largest market increased by 3% to SEK 18 billion 562 million.

Regional sales increased by 8% to 13 billion 800 million kronor in the US.

British regional sales were affected by Europe, down 2% to SEK 7 billion 150 million.

Sales in France increased 4% to 6 billion 580 million Swedish kronor compared to the same month in Sweden; sales in Sweden in the H&M group also increased by 4% to 5 billion krona.

Italy's sales increased by 5% to SEK 4 billion 470 million.

Sales in Spain rose 6% to SEK 3 billion 890 million.

Sales in Holland recorded a decline of 3% to SEK 3 billion 670 million.

Swiss sales were almost unchanged from last year's growth, rising 1% to 3 billion 30 million kronor.

Sales in other parts of the world surged 17% to SEK 41 billion 990 million.

As of May 31st, there were 4498 stores in H&M group, an increase of 10% or 450 over the same period last year.

Karl-Johan Persson, the group's chief executive, said in a conference call after the earnings announcement that the global fashion retailing industry is undergoing a critical period of pformation. Especially, the brand management mode and retail channel are gradually tilting towards digitalization and youth. This makes the brand of the group face great challenges, but it also creates new market opportunities for the group.

He disclosed that the H&M group's online business in the first half of this year has been developing very rapidly. Now it accounts for 25% to 30% of total sales. It is expected to grow at a rate of at least 25% per year, and its profitability is almost the same as that of physical stores.

The report shows that H&M brand's official website has entered 6 new markets this spring, namely, Turkey, Taiwan, Hongkong, Macao, Singapore and Malaysia, which are now open to 41 countries and regions around the world. In the second half of this year, two new versions of Philippines and Cyprus will be added.

In terms of physical retailing, Karl-Johan Persson said the H&M group will maintain a positive attitude of expansion. It will open about 500 new stores this year while closing 100 undesirable stores.

In the past 6 months, H&M has opened its new store in Kazakhstan and Columbia, and will enter the Iceland, Vietnam and Georgian markets in the future.

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For the current fiscal year, Karl-Johan Persson said the group will continue to expand its brand business with the focus of digital development. However, he stressed that digitalization does not represent a single online business, but an overall upgrading of technology, including physical retail outlets. In the future, consumers will be able to experience the seamless retail channel between H&M official website and stores.

It is noteworthy that the new store Arket, which is highly valued by H&M group, will open its first store in London in the second half of this year. The location of the brand is as high as that of COS and &Other Stories. It emphasizes the minimalism, practicality and Scandinavian lifestyle, and there will be a cafe in the shop.

However, Karl-Johan Persson believes that Chinese consumers are not mature enough, so the brand has no plans to open stores in the Chinese market in the short term.

At present, H&M group has a long way to go from its biggest competitor and Zara parent Inditex group.

There are indications that Zara is still in the growth stage, and the growth rate of the fast fashion industry including H&M has begun to slow down.

In the three months ended April 30th, ZARA parent Inditex Group sales rose 14% to 5 billion 600 million euros, with sales growth in Europe, Asia and the Americas the strongest.

Group gross profit also increased by 14% to 3 billion 200 million euros, gross margin was 58.2%, net profit rose 18% to 654 million euros, which is two times more than that of its main competitor, STO: HM, in the first quarter net profit.

At the same time, the whole fast fashion industry is also facing the threat of "ultra fast fashion".

The rising fashion providers, including Boohoo.com and ASOS, are competing for consumers who are more and more difficult to meet with "Ultra-Fashion". Efficiency has become an increasingly important measure in the fashion industry.

The Inditex group has introduced its e-commerce business to more emerging markets, further expanding its online market share and upgrading its inventory management system to cope with the increasingly fierce challenges of the fashion business market.

H&M shares rose 1.7% to 208 Swedish Swedish kronor after the earnings announcement. However, since the beginning of this year, its stock price has fallen by nearly 20%, with a market capitalization of about 303 billion 900 million kronor about $35 billion 650 million.

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