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Seven things we learned from H&M’s annual report

Earlier this week H&M Group blamed extreme weather and excess stock for a tough start to the year, as operating profits tumbled 62% year on year in its first quarter. But how does the high street giant plan to turn things around? Drapers takes a closer look at the H&M 2017 annual report.

A 2030 vision for sustainability

According to H&M by 2030 all the group’s brands will use only recycled or sustainably sourced materials in their collections. The 2020 goal is for suppliers’ production processes to have no chemicals the retailer has identified as hazardous. In addition, it also aims for 100% of its cotton to come from sustainable sources in the next two years. In 2017, sustainable sources made up 59% of the H&M group’s total cotton use – up from 43% in 2016.

RFID technology to be rolled out globally

RFID (Radio Frequency Identification) technology means items with a digital price tag can be located quickly, providing precise information on an item’s availability. H&M said: “The technology, which uses radio waves to transmit information, also makes the work involved in stocktaking and product handling quick and easy – freeing up time for staff to spend with customers.” Following successful tests in Denmark the group said it plans to roll-out of RFID to more European markets in 2018, followed by a gradual roll-out globally.

New brands Arket and Afound to propel the Group forward

H&M launched new brand Arket in 2017, with its first store opening on London’s Regent Street in August. The business has since opened seven more stores in cities Copenhagen, Brussels and Munich, as well as online in 18 European countries. In 2018, it is launching off-price marketplace Afound, with the first physical store due to open in Stockholm, in parallel with the launch of a digital marketplace in Sweden.

H&M expands online to new markets including SE Asia

In the 2016/2017 financial year H&M’s online store opened in eight new markets – Turkey, Taiwan, Hong Kong, Macau, Singapore, Malaysia, Cyprus and the Philippines – and in December Kuwait was added via franchise, making e-commerce available in 44 of H&M’s total 69 markets. It is set open in further markets in 2018, including India, Saudi Arabia and the United Arab Emirates.

H&M launches The Erling Peon Award

In 2017 H&M Group launched The Erling Peon Award in honour of Erling Peon, who founded the business in 1947. The group said award will be given annually to “recognise colleagues around the world who are living our shared values, achieving fantastic results and inspiring others”.

A climate positive value chain by 2040

The H&M Group launched an ambitious, new climate change goal in 2017: to be “climate-positive” across the entire chain by 2040. This means removing more greenhouse gas emissions from the atmosphere than it emits. To achieve this there will be a focus on greater energy efficiency, renewable energy and carbon sinks capable of absorbing un- avoidable greenhouse gas emissions.

H&M launches a presence in five new markets

During the year H&M opened physical stores in five new markets: Kazakhstan, Colombia, Iceland, Vietnam and Georgia. For 2018 it is planning to open around 390 stores in total and to close 170, making a net total of 220 new stores for the H&M group. In total, there are around 4,700 stores, the majority of which are H&M stores. It opened 11 new stores in the UK during 2017.



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