Swedish fast-fashion clothing retailer H&M reported the lowest profit of the past 16 years, leaving the largest inventory in the company's history, promising a large wave of clearance sales for Vietnamese fashion hunters.
|Bulky apparel inventory spells good news for deal hunters |
Specifically, the fashion retailer's leftover clothing could pile up to nearly $4 billion, commensurate with 17.6 per cent of its total sales revenue, as shown in its financial statement published on March 27, according to newswire Bloomberg.
Additionally, net profits earned in the fiscal first quarter ending on February 28 shrank by 44 per cent against the same period in 2017, resulting in gloomy earnings of $167.4 million.
Due to the retailer's poor results leading to huge discounts, H&M saw an abrupt drop in its stock by 4.1 per cent to $14.65 per share during Tuesday morning.
Over the first two months of 2018, due to unpredictable weather changes in Europe, H&M's winter and spring collection fared poorly, leaving a hefty bulk of leftover clothes behind without any signs of recovery in March.
|Vietnamese fashion buyers expect large discounts on unsold apparel in Europe, following the parent company's 16-year record low profits. |
Recently on January 27, H&M Vietnam managed to open the third brick-and-mortar (B&M) store in District 2, Ho Chi Minh City, offering appealing discounts to draw the attention of fashion buyers.
Previously, H&M Vietnam kick-started its first store in September 2017 in Vincom Dong Khoi, Ho Chi Minh City, followed by the first store in the capital in November 2017.
In early 2018, in an attempt to stimulate purchasing demand in the company's target market segment, H&M launched its first discount-oriented fashion trading platform where the retailer offers products from a season-less collection selected from its own designs and international brands at a "peachy" price, which in turn allows customers to cross-search and compare prices of the same products offered by different physical and online stores.
By Sam Luong