For years, so-called fast fashion purveyor H&M (which stands for Hennes & Mauritz) has quickly opened store after store around the world to compete with rivals like Zara and others. Now, however, the company says it will slow down its pace of new store openings in order to concentrate on current stores and online sales.
H&M announced Tuesday in its full-year earnings report that it will no longer work to open 10% to 15% more physical stores each year and instead aim to increase sales at current divisions by the same levels.
H&M currently operates more than 4,300 stores in 64 markets around the world. While the company still plans to open hundreds of new stores in 2017, many of these new stores will be for the retailer’s other brands, including COS, & Other Stories, Monki, Weekday, and H&M Home.
Additionally, the company says it will aim to increase sales in its current operations by 10% to 15% both online and in-store.
The change of pace, the Wall Street Journal reports, comes as H&M struggled in the last quarter in some of its typically strong markets, while benefiting in newer markets.
Despite the difficulties, H&M reported on Tuesday that in the fourth-quarter its sales increased 8%. However, for the full year, the retailer’s net income was down 11% from the previous year.
According to the company, the decrease was the result of increased markdowns and higher purchasing costs.
Analysts tell the WSJ that H&M’s new strategy could provide the company with a needed jolt in sales, especially online, where it competes not only with traditional retailers like Gap, but with Amazon.
As a result, H&M Chief Executive Karl-Johan Persson tells the WSJ that the retailer is considering selling clothing through Alibaba.