H&M's Fashion Challenge: Struggles Amid Slow Sales Growth

H&M's sales edged up by just 1% in March, signaling a slow start to the spring and summer season. Despite increased marketing with pop stars, the Swedish retailer's profitability declined. CEO Daniel Erver aims to rejuvenate the brand amidst high inflation and fierce competition from Zara and Shein.

H&M reported a modest 1% sales increase in March, highlighting a sluggish start to the crucial spring and summer sales period. This follows a weaker-than-expected first quarter for the Swedish retail giant, which has been intensifying its marketing efforts with little immediate return on investment.

CEO Daniel Erver acknowledged the challenges faced by the company during a call with analysts, citing high inflation and limited customer spending power. Despite efforts to enhance the brand's appeal through collaborations with pop stars like Charli XCX, profitability has taken a hit, and shares have dropped 11% since the year's onset.

The company's sales reached 55.3 billion Swedish crowns for the December-February quarter, falling short of expectations. With a strategic focus on competitive pricing and store reductions, H&M is attempting to navigate tariff impacts and fierce competition from the likes of Zara and Shein in key markets such as the U.S., the Nordics, and the UK.

(With inputs from agencies.)