H&M is making moves to draw back customers from competitors like Zara and Shein by offering more discounted fashions in the upcoming months. The Swedish retailer had been focusing on profitability rather than sales volume to achieve a 10% operating margin goal, but this strategy has resulted in a loss of market share. H&M is now shifting its focus to boosting sales growth to keep up with the competition.
However, external factors such as material costs and currency fluctuations are making it challenging for H&M to reach its 10% margin goal this year. In order to achieve this goal, the retailer needs to ramp up sales growth, especially in the remaining two quarters of the year. Chief Executive Daniel Erver emphasized the importance of improving sales in the third quarter to reach their target.
To attract more customers and reinvigorate interest in their brand, H&M plans to increase discounts in the second half of the year. Erver mentioned that they will be offering slightly higher reductions in prices to engage customers. In addition to discounts, the retailer aims to create exciting collections, experiences, and events to generate more excitement around the brand.
With summer dresses priced as low as $9.99 and jeans starting at $19.99, H&M is looking to capture the attention of budget-conscious shoppers with their affordable fashion offerings. By offering more discounts and engaging customers with exciting initiatives, H&M hopes to revamp their image and boost sales in the coming months. This strategic shift in focus from profitability to sales growth demonstrates H&M’s commitment to regaining its competitive edge in the fast-paced fashion industry.