HOW H&M FELL BEHIND THE ONLINE FASHION UPSTARTS

PROFITS at H&M have fallen 20pc as it struggles to keep up with fast-paced changes in online fashion shopping.

Chief executive Karl-Johan Persson warned that the market was being redrawn with ‘new players coming in and customers’ expectations changing’.

But the 42-year-old admitted online sales were failing to offset a drop in footfall to its stores and were missing targets.

He added: ‘This is, of course, something that we are not satisfied with. We are rapidly making investments to seize opportunities that arise with the shift within the industry.’

This included improving the brand’s online store, adding products to it and providing more delivery options, Persson said. Traditional fashion retailers are facing growing competition from online rivals such as Asos, Boohoo and Missguided, which can change stock quickly to follow trends and often offer faster delivery.

H&M, which plans to close 90 stores and open 475 new ones, said its profits had fallen from £577m to £460m in the three months to August 31.

This was despite a slight rise in sales to £4.7bn from £4.5bn.

‘Aggressive’ summer discounting had been used to reduce the firm’s inventories, but they were still up 8pc at the end of the quarter.