Retail giant H&M to open regional stores
Swedish fashion retailer H&M, which has focused its local expansion on Australia’s capitals, will this year roll out stores in the Queensland regional cities of Townsville and Rockhampton.
The move goes against the tide of a depressed retail sector where stores have closed and a number of retailers failed outright, and also signals an expansion into centres that have been hit by the downturn in the resources sector.
H&M will open the two stores at centres owned by listed property group Stockland, which is already its landlord in the Sydney CBD.
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Stockland’s commercial property chief executive John Schroder notes the global fashion brand is making an investment in regional Queensland.
“We completed redevelopments at both Stockland Townsville, with our co-owner AMP Capital, and Stockland Rockhampton in recent years and we’ll continue to draw the biggest and best brands to maintain our lead as the number one shopping destination in both cities,” Schroder says.
A number of retail chains have failed this year, including the local arm of Topshop, as well as Herringbone, Rhodes & Beckett, Pumpkin Patch and Payless Shoes.
However, a handful of international retailers including Sephora (owned by French giant LVMH), H&M, Spanish fast fashion chain Zara and Japanese department store Uniqlo continue to thrive in the local market.
H&M is continuing to expand throughout Australia.
H&M opened its Sydney flagship store at Glasshouse on Pitt Street Mall in 2015 and has 21 stores in Australia and more than 5000 stores in 66 countries worldwide.
Overnight, the global Swedish giant announced a stronger than expected profit in the second quarter thanks to the opening of new stores and better cost control.
Net profit for the period between March and May stood at 5.9 billion kronor ($US691 million), up by 10%, while turnover also rose 10%.
“The profit increase in the second quarter is mostly explained by continued expansion and tight cost control,” the Swedish group says in a statement.
H&M continues to open physical stores around the world to compensate for the downturn, and even decline, in its profitability, amid fierce competition from online sales platforms.
“Customer behaviour and expectations are changing at an ever-increasing pace, with a greater and greater share of sales taking place online,” chief executive Karl-Johan Persson says in a statement, adding this “brings great opportunities for the H&M group”.
“I’m hearing that we are lagging behind in e-commerce, but we are convinced that our strategy ensures the conditions for our long-term growth,” he says.
H&M expects to increase its annual online sales by 25% in the coming years, while total sales are expected to grow by only 7% in June (down from the 8% increase in June 2016), a crucial month for (northern) summer sales.
– with AFP
This article originally appeared on www.theaustralian.com.au/property.
