Dividends and H&M to close hundreds of stores as online shift accelerates

If you were to be asked what is the second biggest fashion retailer, what company would you say? The biggest is Spanish company Zara which reported a return to profit in May-July quarter. The second largest is Swedish company H&M.

In an article by Anna Ringstrom of Reuters, Chief executive Helena Hellmersson said although the challenges are far from over, we believe the worst is behind us and we are well placed to come out of the crisis stronger. The company has expanded its network of shops around the world, will aim to cut their number by a net of 250 or 5% of the stores in their current network. The chain has 5,000 stores.

The company said sales in the stores has continue to recovery and reported a smaller than expected drop in third quarter profit.

Analysts at JPM it a note said, H&M has improved the quality of the H&M business model and infrastructure and the turnaround is still very much well on track.

The company is expected to make 2.37 billion crowns (or $352.8 million).

Linking to dividend paying stocks, all companies had to ensure their inventory levels are well managed. There is a process to all retail companies – the item comes in at full price for a month or so, then seasons begin to change and sales happen and then larger profit mark downs occur then the items are sent to other retailers to send at or near costs. Managing inventory and ensuring customers receive what they want, when they want is a challenge which keeps people in the retail world. How does your company manage their inventory?

There are more questions than answers, till the next time – to raising questions.

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