H&M has been working very hard to take the fashion world by storm. Their current plan is to absorb the overhead costs as to not transfer them to shoppers which, they are hopeful will help the company to gain more market share. So far, it’s working! Net profit has increased almost 5% from last year’s first quarter. However, their profit margin has lessened almost 2%, causing a drop in shares once the information got to shareholders.
CEO Karl-Johan Persson isn’t worried. He says “not raising prices has contributed to strong sales even if it has had a negative effect on the gross margin.” The plans for the upcoming year include adding 275 stores to an existing 2,500. A new store chain in Europe will also be in the plans for the 2013 H&M takeover. With Fashion Star producing many viewers and building interest, there is not a doubt that H&M will be successful in its endeavors. And for shoppers that means – SALES!! In a day like today, runway-on-a-budget is a pretty sweet deal.