Global fashion company Hennes & Mauritz (H&M) turned profitable in its first year of operations in India and clocked significantly higher sales than largest rival Zara in its first year in the country. H&M’s Indian unit posted Rs 194 crore in sales during year-to-March 2016, with a net profit of Rs 1.4 crore. With just four operational stores last fiscal — the first one opened in October followed by another in November and two more in March itself — the Swedish retailer’s performance is the best that the retail market has seen within the apparel space.
“H&M is in India for the long term, we look forward to continuing to strengthen our offer and catering to our customers across the country,” an H&M spokesperson said. The retailer clocked more than Rs 1.75 crore in sales on the opening day of its first store in India, almost double that of its largest rival Zara sold on its inaugural day five years ago at the same location, Select City Walk mall in New Delhi. At present, it has expanded to 12 outlets with plans to open another 38 by 2020.
In comparison, Zara posted its slowest growth in India at 17 per cent in FY16, indicating waning of its novelty factor and a few consumers shifting to global rivals such as H&M and Gap. To be fair, Zara’s sales have doubled every two years and touched Rs.741 crore in FY16. While experts feel H&M could also face a similar challenge, its large assortment and reasonable pricing could help sustain high sales.
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