H&M to launch online market in Australia

The fast fashion chain said the online offer would complement its local store network.

H&M has made heavy investments in its online offer and its more fashionable collections are beginning to pay off. Picture: Aaron Francis

Swedish clothing department store H&M is set to launch an online market in Australia in the second half of 2020 to capitalise on the consumer shift towards digital purchasing.

Launching the online operation may see some switch away from bricks and mortar outlets but the fast fashion chain said the online offer would complement its local store network.

“We are extremely excited to launch online shopping in Australia later this year. This significant milestone will fully round out H&M Australia’s multichannel offering. We look forward to providing 24/7 access to our fashion and creating new experiences for our customers,” country manager Thomas Coellner said.

It comes at a time when the budget end of the local fashion market is bearing the brunt of a tough retail environment, suffering multiple business collapses amid soft consumer sentiment exacerbated by sluggish wage growth and elevated household debt levels.

National jeans and fashion chain Jeanswest was placed into voluntary administration this month, just weeks after the collapse of department store Harris Scarfe and the demise of women’s fashion chain Bardot.

Meanwhile H&M, also positioned in the price-conscious market segment, is the world’s second-biggest fashion retailer and undertook a radical overhaul of its business, driving a 12 per cent lift in its global operating profit in the 12 months to the end of November.

H&M, which generates more revenue than any other fashion chain except Zara-owner Inditex, hit headwinds worldwide about four years ago, when its long-running strategy of opening new stores to drive growth stopped working.

Store-based sales declined as consumers in many markets bought more clothing online but H&M has since made a heavy investments in its online offer and its more fashionable collections are beginning to pay off.

The company said its online and physical stores were being increasingly integrated and it was rolling out more online stores globally. It is focused on growth markets but has been reducing its presence in Europe, and is also advancing its mobile technology, allowing customers to buy more easily.

H&M first entered the Australian market in 2014 and has grown to 40 stores nationwide, offering a broad range with a focus on trends allowing for customers to create their personal style.

The Swedish retailer has become a feature of the local market, wracking up profits on the back of cumulative sales topping more than $1bn, likely at the expense of department store rivals Myer and David Jones.

The healthy sales at its existing physical stores in Australia has also put some local fashion specialty retailers under the pump.

Sales at in the local unit jumped by 10.5 per cent to $311.8m in the year ended January 31 2019, well about the relatively flat overall clothing footwear and accessories market.

In addition to H&M, the company includes the brands COS, Monki, Weekday, & Other Stories, H&M HOME and ARKET as well as Afound. In total, the H&M group has 51 online markets and more than 4900 stores in 74 markets including franchise markets.