Hennes & Mauritz AB (HMB) began selling cheap-chic clothes online in Sweden about the same time Google Inc. (GOOG) started crunching its first search results. Fifteen years later, H&M’s American fans are still waiting for Web shopping.
If the hype is to be believed this time around — the Stockholm-based retailer has postponed twice before — in August H&M will enter the world’s biggest online apparel market, allowing American shoppers to click to buy $12.95 zebra-striped ballet flats and $59.95 trenchcoats.
With the delay, the retailer has missed out on revenue as it tries to make up ground lost to rival Inditex SA, owner of the Zara brand. Inditex, which overtook H&M in 2006 as Europe’s biggest apparel seller, has topped the Swedish company’s sales growth for the past three years.
Since 2011, when Zara began selling online in the U.S., the American market for apparel and accessories online has grown 44 percent to $54 billion, researcher EMarketer estimates.
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H&M was “late to the party” in the U.S., said Richard E. Jaffe, an analyst with Stifel Nicolaus in New York. With the roll-out, “they need to be competitive from day one.”
Inditex shares had gained 69 percent since its U.S. Web shop opened Sept. 7, 2011 before today’s trading, more than double the gain for H&M shares in that time. Despite its relatively late start — Zara first sold clothes online in 2010 — Inditex now offers Internet sales in 23 markets while H&M does so in eight.
H&M rose 1.1 percent in Stockholm today, bringing this year’s advance to 7.4 percent. The shares closed at their highest level in 10 months as Deutsche Bank AG upgraded its rating on the stock to buy from hold and said revenue growth will accelerate, partly due to the online rollout.
Date: Jul 29, 2013