H&M Racist Ad “adds” to Company’s Downfall
A scandal of racism at H & M is the latest indication of management problems at the Swedish clothing giant, once dear to buyers, but now according to analysts, in a struggle to shift to e-commerce.
The prominent fashion group is one of the largest industrial export and heavyweight brands in Sweden, like Ikea, Volve, Electrolux and Spotify.
It is in possession of Persson family dynasty. Since 1974, it is listed in Stockholm stock exchange.
H&M is in collaboration with singing superstars such as Beyonce and Madonna, and esteemed fashion names like Kenzo, Lanvin and Sonia Rykiel, who have exclusively designed collections for the brand.
H & M includes in the list of most prominent brands worldwide. It is 23rd best company in global brand consultancy Interbrand of 2017.
However recently, H & M has had trouble attracting buyers to its 4,553 stores spread worldwide and has started working on making online offers.
According to Nordnet bank economist, Joakim Bornold, “It´s (been) one of the toughest years for H&M,”. He further added that company’s stock price has seen downfall by 35%.
In December, H&M declared a drop of four percent in sales in the fourth quarter of the last year, to 50.4 billion kronor which means 5.0 billion Euros, $ 6.22 billion.
This downfall was far more than expectations.
In December, H&M that also owns Monki, COS, Weekday, Arkey, Cheap Monday, and H & M Home, said that it would close stores, but did not specify dates and localities.
The company will be publishing its annual report on 31st January.
Bornold said, “They have failed in describing their vision for the e-commerce business and how they plan to compete with truly digital companies,” it further added, “That, combined with worse sales figures than expected, has affected investors’ faith in the company.”
Karl-Johan, the CEO H&M has rejected the analysis, saying “Our digital strategy is crystal clear. E-commerce, for all our brands, is definitely a part of the company that is going very well and is profitable,”
H&M racist ad has played a vital in company’s downfall.