H&M posted sales at Rs 1,402 crore in the 2020-21 period, down from Rs 1,582 crore a year ago, according to its latest filing.
The performance is in line with the general trend in the apparel and lifestyle segment where rivals including Marks & Spencers,
, Trent owned by Tata, Aditya Birla Fashion & Retail and Lifestyle International saw their revenues decrease and losses increase during the year.
“The company assessed the impact of Covid-19 resulting specifically from the company’s inability to open its retail stores due to various government regulations and thus the reduced demand for its products,” H&M said in its documents at the Business Register.
H&M offers in-house created fast fashion items and collaborates with designers for one-off collections. It maintains a large inventory of basic and everyday items from places including India and Bangladesh that have lower price tags than most of its rivals.
Inditex Trent, a joint venture with Tata that operates Zara stores in India, saw revenue drop 28% to Rs 1,126 crore last fiscal year, resulting in a net loss of Rs 41 crore. Marks & Spencer Reliance also saw sales drop 32% to Rs 710 crore. The joint venture recorded a net loss of Rs 72 crore.
In FY20, H&M, which entered India six years ago, overtook its Spanish rival Zara which opened its doors ten years ago. Both brands have enjoyed great success in India since their arrival, but Zara’s performance has declined due to slow store expansion. For example, Stockholm-based H&M has opened an average of one store per month in India so far since entering the country in October 2015, bringing the total count to over 50. By comparison, Zara has opened 21 stores so far, although the its turnover per shop is nearly double that of its rival.
Between April and June last year, most shopping malls were closed in the country, impacting sales in nearly all discretionary categories. With stores closed for most of the first quarter and customers worrying about going out for the whole year, ecommerce sales have increased but have not been able to compensate for the sales in their brick-and-mortar stores.
During the fiscal year, H&M also became one of the largest online apparel brands with sales of Rs 579 crore from e-commerce business, accounting for around 42% of its overall sales.
Analysts said apparel brands and retail companies continued to be affected in the first half of the 21st year due to the resurgence of Covid, partial freezes implemented in parts of the country and weak consumer sentiment. .
“However, sequential revenue growth was visible from the third quarter of the 21st year onwards and we believe that demand could exceed pre-Covid sales from the fourth period of the 21st year with the loosening of blocks and restrictions, a healthy pace of vaccination, increased mobility with the opening of offices, shopping malls and multiplexes, holidays and the wedding season, pent-up demand etc. “said Krupal Maniar and Darshit Shah of ICICI Securities in a report.