H&M Hennes & Mauritz Slows Store Expansion

Ned Piplovic


H&M Hennes & Mauritz AB (ST:HM-B) saw its share price drop more than 10% during trading on Jan 31, amid investor concerns regarding the company’s plan to close more stores this year than any year in the past two decades.

While most U.S. customers have become familiar with the H&M brand since 2000 when the company entered the U.S. market, the Swedish fashion retailer dates to 1947 and has been expanding significantly throughout mainland Europe since at least the 1970s. After opening its first U.S. store on Fifth Avenue in Midtown Manhattan, the company engaged in an aggressive expansion plan and, in just over a decade, the United States became H&M’s second largest market in terms of store count – trailing only Germany.

The customers embraced the company’s fashion concept, as well as supported the store experience and store expansion efforts. However, the customers wanted additional channels for shopping. While H&M eventually committed to establishing a significant online presence, the company trailed its main competitor’s entry into online distribution and e-commerce.

The company plans to close 170 stores and open 390 new stores globally in 2018. While closing stores to change the size of the store or to try a new location is a normal business practice, the 43.6% ratio of store closings versus new openings for 2018 is more than twice the 19% ratio from 2017. For H&M, the 220 net new stores will be the lowest level since 2010 and the 2018 store growth rate of 4.6% will be almost 62% lower than the 12% average growth rate since 1999.

Exclusive  9 Best Dividend Stocks to Buy Now

In addition to slumping sales growth and the expansion slowdown, the H&M also came under criticism recently for an advertisement that many considered offensive and even caused one celebrity to cut ties with the company. While that recent incident did not have any impact on the company’s one-third drop in share price during the past 12 months, or a 50% drop over the past three years, it might be a small factor in slowing or hindering the company’s immediate revival plans.

Some investors may see now as a good time to buy shares amid H&M’s turnaround plan of funneling excess inventory through a new discount brand and further investing in online sales. But other investors could steer clear and instead look for the next fresh brand to appear on the horizon in the endlessly changing fashion retail industry.






Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.


Like This Article?
Now Get Mark's FREE Special Report:
3 Dividend Plays with Sky-High Returns

This newly-released report by a top-20 living economist details three investments that are your best bets for income and appreciation for the rest of the year and beyond.

Get Access to the Report, 100% FREE

previous article

In the wake of the most recent cryptocurrency heist from Coincheck – a cryptocurrency exchange based in Tokyo – should other cryptocurrency platforms and exchanges be concerned that this might scare some potential investors away. Reuters reported that hackers stole the equivalent of more than $500 million, or 90% of the exchanges total holding of


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details


Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details


Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details


Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details


Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details


Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details



Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.