H&M out of fashion in Australia

THE H&M fashion juggernaut has hit a speed bump, posting its first drop in sales since touching down on Australian shores.

The latest update from the local arm of Swedish fashion titan Hennes & Mauritz, which trades as H&M, shows sales came in at $352.7 million for the year to November.

That is down 2.8 per cent on the $362.4 million it posted in the same period a year earlier.

It is the first time sales have gone backwards since the fashion giant opened its first Australian store in early 2014.

The details are contained in accounts from the local arm lodged with the Australian Securities and Investments Commission.

They will come as a welcome break for traditional Australian retailers such as Just Jeans and Myer, which have had to confront the entrance of global fashion powerhouses such as H&M, Zara and Uniqlo over the past decade.

The most recent trading update from Premier Investments showed its legacy fashion businesses, which includes Just Jeans, Jay Jays, Dotti and Portmans, delivered far better than expected sales growth in the year to January.

Profit at the Australian arm of H&M fell to $2.61 million in the year to November, down from $6.27 million in the 2017, its accounts show.

The accounts include the contribution from the Hennes & Mauritz-owned brand COS but do not break out that unit’s sales or profit.

The dip in profit came as H&M opened 11 stores during the year to November, taking its network to 37.

It will open its 38th store in Australia at Westfield Parramatta in Sydney next week.

The drop in sales at H&M stands as a dramatic turnaround for the rapid growth it has previously experienced.

Annual sales have run at high double digits, surging from $161.9 million in 2015.

H&M Australia country manager Thomas Coellner said the fashion giant was continuing to invest and expand.

“The rapid transformation of the fashion retail sector continues and our aim is to offer the best combination of fashion, quality, price and sustainability with our assortment,” he said. ”We take a long-term perspective and have a positive view of the future and the opportunities that exist for H&M Australia.”

The retailer now employs more than 2300 workers, having added 650 during the year to November.

The most recent accounts for Uniqlo Australia show its sales rose by close to 15 per cent to $243 million in the year to August 2018.

Net profit at the local arm of the Japanese fashion giant jumped by close to 30 per cent to $9.75 million.

Zara Australia’s most recent financial report shows its revenue rose 10 per cent to $282 million for the year to January 2018 compared to the same period a year earlier. Net profit came in at $8.92 million, down from $10.3 million.