Headlines

H&M Profits Drop 62 Percent

The company grapples with $4.3 billion in unsold inventory

Published

7 years ago

March 29, 2018

H&M (Stockholm, Sweden) announced its first-quarter earnings, which revealed a decline in operating profit of 62 percent. Part of that decline is being attributed to a fall in foot traffic, as customers increasingly turn to online shopping or other low-cost options.

Another attributing factor is an overabundance of unsold inventory: The company’s unsold merchandise has grown 7 percent over the past year and now amounts to $4.3 billion of inventory. The company says that it increased inventory as a response to the 220 new stores it opened last year as well as in response to a ramping-up of its e-commerce operation.

According to The New York Times, critics blame poor inventory management and underwhelming product offerings for the large amount of lingering merchandise.

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