H&M’s 3-Month Financials Report 42% Profit Increase
What happens with H&M, like Uniqlo and other fast-fashion retailers, is always important to note when it comes to youth culture fashion globally. This week, H&M Hennes & Mauritz reported their 3-month financials from December 1, 2009 to February 28, 2010 with very positive results of profit increasing 42% after tax. H&M’s Groups sales minus VAT increased 7% or a total of 13% in local currencies.

The gross profit margin was a whopping 61.9%.

In the month of March specifically, sales in local currencies including VAT increased by 21% compared to the same month previous year. According to H&M, sales in March were affected by Easter occurring one week earlier than last year.

It could be said that H&M is on trend with their collection for spring featuring popular floral patterns and sustainable materials.

“We are extremely proud of our Garden Collection for women, which has organic and recycled materials in every single garment,” says Ann-Sofie Johansson, Head of Design at H&M. “The mix of floral prints and khaki classics works brilliantly for day to evening wear. I particularly like the sheer floral ruffle dress, the drawstring khaki jacket and the beautiful red rose bustier dress.” There is also a selection of garments in sustainable materials in the men’s department. “There are some real highlights to look forward to,” says Ann-Sofie, “like the super-smart organic cotton slim-fit suit worn over a crisp gingham shirt.”

H&M also launched their skincare collection with organic ingredients as well, moving the retailer and brand into all new categories.

While many parts of the economy, especially in fashion are still suffering from the recession, H&M continues to do well for many reasons, including successfully opening new stores. First, their Seoul, South Korea opening in February, 2010, which was a major hit, followed by successful opening in Tel Aviv and Jerusalem, Israel in March.

Uniqlo -Fast-Retailing Reports First Half up 43%, but Same-Store March Sales Down 16.3%
Another fast-fashion retailer/brand worth tracking is Uniqlo from Japan. Often on the cutting-edge of styles and known for unique designer collaborations, their recent financial reports were interestingly mixed.

First, their first-half operating income was up 43.0% year on year. FAST RETAILING achieved a significant increase in both revenue and income in the six months from September 2009 to February 2010. Underlying this strong performance were consolidated gains in both revenue and profit at mainstay UNIQLO Japan operations and also at UNIQLO international operations.
UNIQLO Japan’s same-store sales increased by a strong 13.1% year on year. Buoyed both by strong new product lines and increased sales of HEATTECH products, customer traffic also jumped considerably spurred by media attention focused on the success of the Paris global flagship store and the launch of the J collection with fashion designer Jil Sander.

However, in the second six months of the fiscal year, same-store sales for March decreased significantly, falling 16.4% year on year. Uniqlo state this could be because of unseasonably cold weather. In the first week of April 2010, same-store sales were up year on year and nearly in line with our forecast.

Uniqlo’s Heat Tech was a huge hit and they will continue to give first-wear brands a run for it, with the introduction this month of their functional innerwear called SILKY DRY, and SARAFINE.

Zumiez Net Sales Increase 20.1%
In our final retail wrap-up report for now, the action sports retail chain Zumiez did well reporting yesterday a new sales increase of 20.1% to $35.8 million in March, 2010 and a comparable same store sales increase of 13.2%. What also considerable about this is that the same store sales increase of 13.2% is a dramatic upturn when considering that last year at this time, they experienced a 17.9% decrease in the same period.

Check our Spring Youth Culture Study 2010 -North America, for more on Zumiez and youth culture shopping store preferences and trends.