H&M's Sales Slump Again

     The once extremely thriving company, Hennes and Mauritz (better known as H&M), has declined in sales for the fifth month in a row. Their main struggle is keeping customers to continue to spend their money at their store in the very intense and very competitive fashion market.  H&M still is profitable, especially with the help of new stores openings in the past year.  However, their five month decline is the longest they have had since the spring of 2009 when the financial crisis hit.  H&M competes with their competitors by having lower prices since their supply chain is slower than others.  However, there are still competitors that have lower prices.  H&M is struggling to find how they want to position themselves.  "Bernstein analyst Jamie Merriman sees two choices for H&M.  Either it should cut prices to blunt the growth of lower-price competitors, putting further pressure on its margins.  Or it can back out of the bottom end of the market and target customers who are prepared to pay more for such products as its recently launched Conscious Collection of clothes made from organic cotton."  In January H&M revealed they are planning to create a new chain called Other Stories which will be aimed to a more affluent shopper.
     I love H&M.  I work close to a mall so I am frequently there on my lunch breaks and H&M is usually one of the shops I always check out since they always have the latest trends.  The article says that H&M is trying to find their position but I think they already have it.  Trendy clothes at a cheap price but not too cheap that the quality suffers.  I do hope H&M turns this around because they are a great store.  They need to continue to bring in the trend right clothes and the customers will buy.  They also will buy I believe if H&M takes one of the two strategies Bernstein suggested.  If H&M lowers their prices but does not sacrifice their quality this is a winning strategy.  Also, having more of a niche store such as Other Stories would be beneficial as it will target specific consumers and they will hopefully be pulled in.

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