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H&M admits sales ‘below plan’ as profits dip

Swedish fashion giant Hennes and Mauritz said on Wednesday that an unusually cool European spring had kept shoppers away and depressed profits in the three months between March and May, though the damage was not as bad as analysts had feared.

Published: 22 June 2016 11:38 CEST

H&M admits sales 'below plan' as profits dip

This year has brought bad news for the Swedish powerhouse. Photo: Fredrik Sandberg/TT

H&M reported a pre-tax profit of seven billion kronor ($846 million) for the period, slightly better than an expected profit of 6.97 billion kronor ($841 million) which was previously predicted by analysts.

In the corresponding period last year however they made a profit of 8.45 billion ($1.01 billion) kronor.

Net earnings fell 17 percent to 5.36 billion kronor ($648 million) in the period, the second quarter of the company’s financial year. A strong dollar added a layer to its problems, which also included low sales prices and high investment costs.

“The sales increase in March and April was significantly below our plan. These two months were negatively affected by cold spring weather in many of our markets,” H&M chief executive Karl Johan Persson said in a statement.

This mostly affected big European markets Germany, Britain and France, but the month of May had been much more promising, Persson added.

“It has been a challenging half-year for fashion retail in many markets,” he said.

“There are a number of things we could have done better, but we have corrected them and see a big potential in the continued expansion of both new physical stores and e-commerce markets. We are just at the beginning of our expansion.”

During the fiscal year H&M expects to open 425 new stories including branches in three new countries: Puerto Rico, New Zealand and Cyprus.

Expressed in local currencies around the world, H&M group sales rose by five percent in the second quarter this year, but only two percent once they were converted into Swedish kronor, the company’s reporting currency.

The retailer’s operating margin slipped to 14.8 percent from 18.2 percent in the same period a year earlier.

In reaction to the report, H&M shares dropped on the Stockholm stock market, declining by 0.8 percent.

French Vogue celebrates 100 years

French Vogue celebrates 100 years. Photo: Thomas Olva/AFP

But as well as celebrating the magazine’s storied history, the exhibit comes at a time of turbulence for the publication.

Just last month, it was confirmed that its editor of 10 years, Emmanuelle Alt, was out and wouldn’t be replaced.

She was not alone.

Looking to cut costs, owner Conde Nast International has axed editors across Europe over the past year, and put international Vogue editions under the direct control of global editorial director, Anna Wintour, in New York.

New York-based Anna Wintour now has overall control of French Vogue. Photo by Christophe ARCHAMBAULT / AFP

Like much of the media industry, Vogue is struggling with tumbling sales and ad revenue in the digital era.

But the latest twist is also part of the endless push and pull between New York and Paris going back to its early days.

“The whole history of French Vogue is one of back-and-forth with Conde Nast in New York – growing more independent for a while, then being reined back in,” said Sylvie Lecallier, curator of the new exhibition, “Vogue Paris 1920-2020″, which opened this weekend after a year’s delay due to the pandemic.

The Paris edition was often the loftier, more bohemian sibling to its more hard-nosed New York version.

But it was also the hotbed in which much of 20th century style and womenhood came to be defined.

“Paris was the place to hunt out talent and content and bring it to New York,” said Lecallier.

The exhibition charts the evolution from art deco drawings of the 1920s through the erotic image-making of photographers like Helmut Newton in the 1960s and 1970s.

Its last peak was under editor Carine Roitfeld in the 2000s, who brought back a provocative Gallic identity by ridding the newsroom of foreign staff and becoming a fashion icon in her own right.

Her successor, Alt, was a quieter presence, though she still oversaw key moments including its first transgender cover star, Brazilian Valentina Sampaio, in 2017.

But internet culture has created “a perfect storm” for Vogue, says media expert Douglas McCabe of Enders Analysis.

“The first 80 years of Vogue’s life, it had the market to itself, it was the bible for fashion,” McCabe told AFP.

“But online today, there are so many other ways to get your information. Influencers, Instagram, YouTube — everyone’s a threat.”

In a world where new fashion trends can blow up around the world in seconds, it has become much harder for a monthly magazine to set the pace.

“It’s not that they can’t survive for another 100 years — but they will be differently sized,” McCabe said.

Vogue has tried to branch out into different areas, including events.

“I used to work for a magazine, and today I work for a brand,” Alt said on the eve of French Vogue’s 1,000th issue in 2019.

But the big money was always in print, and Vogue Paris sales are dropping steadily from 98,345 in 2017 to 81,962 to 2020, according to data site ACPM.

It is perhaps unsurprising that the new top job in Paris, redefined as “head of editorial content”, went to Eugenie Trochu, who was key to building the magazine’s online presence.

She declared herself “thrilled to be part of Vogue’s international transformation”.

For the curator of the exhibition, it is ironic timing.

“We had no idea it would end like this when we started work on the exhibition,” said Lecallier.

“Who knows where it will go from here.”

The exhibition Vogue Paris 1920-2020 is at the Palais Galliera in Paris’ 16th arrondissement. The gallery is open 10am to 6pm Tuesday to Sunday and is closed on Mondays. Tickets for the exhibition are €14 (€12 for concessions and under 18s go free) and must be reserved online in advance.

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