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H&M Group witnesses big fall profits amid covid crisis last year

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H&M Group, 03 February: Showing a weak sale, H&M Group’s Q4 report earlier on Friday said that there are big profit falls, however, expecting a way through after a tough September- November quarter. Having a weak sale range of being down to 23% from December to January 27, it said that the current situation of the pandemic would continue hurting the fiscal first quarter of the year.

H&M is a well-known Swedish multinational clothing retail company operating in over 74 countries currently, however, its operations got disturbed like every other thing due to the covid pandemic. The overall reduced profit margin has led to the fast-fashion giant closing stores in India while their primary focus remains on online shopping triggered during the pandemic period.

Talking about the scenario, Emily Salter at GlobalData said, “It’s continuing to play catch-up with its digital proposition, [as] online sales accounted for 28% of the group’s total sales in FY2019/20.” Further, she added, “It faces increasing competition in Europe and the US from players such as ASOS and Zara as they hone their digital offers. The group’s previous strategic plan of focusing on online, increasing the efficiency of its supply chain and the fine-tuning of its physical network was the right strategy, but if it had been put in place earlier it could have better mitigated the impacts of Covid-19.”

Also read: CCI approves Flipkart’s acquisition of ABFRL minority stakes

“Optimising its store estate will be key in FY2020/21, with a net 250 stores expected to close versus only 58 net closures in FY2019/20. The focus needs to be on elevating its remaining stores, as well as more closely associating them with one of H&M’s other priorities: sustainability”.

CEO Helena Helmersson quoted, “With strong, profitable online growth and good cost control we succeeded in ending the year in profit and with a strong financial position. Taking decisive measures quickly, combined with an attractive customer offering, led to a better recovery than expected up until the second wave of the pandemic struck. Our measures to mitigate the negative effects of ongoing restrictions and closures are continuing. Although the situation at the time of writing is highly challenging, the H&M group stands strong.”

Retail

Gujarat to set-up 2 mega textile parks as part of union budget announcement

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March 05: The Gujarat government will be setting up 2 mega textile parks to ‘enable forward and backward integration’ in the sector. This was revealed while the state budget was presented yesterday. This project will be done as a part of the union budget announcement of setting up 7 textiles parks of such kind. This move ensures a long way for the industry to compete globally.

A top English language daily quoted Chintan Thaker, co-chair, ASSOCHAM Gujarat state council, as saying, “Mega Investment Textile Parks will make the industry more competitive at a global level and this will not just boost exports but at the back-end, it will also help generate more employment. At the same time, a single cluster will definitely help bring in more investments in the textile sector.”

He further stated, “This will give an impetus to MSMEs in the textile sector, which is the highest employment generator after agriculture. It will help ancillary units in textiles in a big way. Moreover, the plug-and-play model for the park will aid employment generation and also give an ecosystem to exporters and domestic manufacturers.”

Also read: Bhumika Group continues to sign brands for Udaipur Mall Project; Van Heusen, Louis Philippe among other

Vijay Purohit, president, Gujarat Garment Manufacturers’ Association (GGMA), said, “A cluster approach not just brings in investments but instead it also helps build an entire textile value chain, which is currently very segregated in different geographical locations. This will help the industry grow, scale-up and innovate while being more competitive.”

Referring to the state government’s announcement over the Rs. 1,500 crore outlay to provide subsidy to the industries under the textile policy, Industry stakeholders said that the help will go a long way in boosting the competitiveness of the domestic manufacturers.

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Fashion

Timex Group brand Helix launches its first smartwatches ‘Helix Smart’ in India

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Helix smartwatches, March 03: Helix that is a Timex Group brand has recently launched its first smartwatch in India titled Helix Smart. This addition aims for Timex to further strengthen its presence in the smartwatch segment.

With Helix smartwatches, Timex is observing the millenials to witness their newly launched product and drive growth for their segment. Timex also expects strong sales for the segment given the affordable price range of the product.

A cherry on the top news is that the newly launched watch is available in three different colours: blue, black and pink and is priced at Rs. 3,995. Also, as of now, the smartwatch will be sold at the authorized Helix retailers store or through the brand’s official website.

Also read: Fossil Group launches virtual watch try-on feature without an additional app

Timex Group already has a well-established market in traditional watches as they contribute largely towards the brand’s sales. Now, the company is focusing to make a landmark in the digital platform and smartwatches segment for future growth in the country.

Sharing his excitement over this new launch, head marketing and e-commerce at the Timex Group, Ajay Dhyani expressed, “We are pleased to announce the launch of Helix’s first-ever smartwatch, Helix Smart. The all new Helix smartwatch embodies the Timex Group’s standard of quality and precision combined with new age technology. We believe that these smartwatches will be well received by the youth.

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Retail

L Catterton backed by LVMH nearing deal to acquire German brand Birkenstock

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ARIZONA from Birkenstock

March 01: L Catterton is nearing an agreement to acquire the German footwear brand Birkenstock as the deal might get final by this week. This information was bestowed by the people aware of the development.

The people also claimed that the investment firm and the family who is behind the German brand might announce the deal this week. However, the identity of the informers cannot be revealed since the information is private.

They also said that the transaction could bring a revenue value to Birkenstock of about 4 billion euros. At the same time, the representatives for both Birkenstock and L Catterton denied claiming the viral information.

Also read: German brand Birkenstock launches a first mono-brand store in Bengaluru

The informers also said that since the conversations are advanced, the agreement might get delayed or even fall apart. L Catterton is a private equity firm that is backed by luxury French fashion house LVMH.

The people aware of the matter also claimed that L Catterton has been competing with the buyout firm CVC Capital Partners in acquiring the German brand as the former were close to sealing the deal earlier this year, however, failing in the process when Birkenstock chose L Catterton’s exceptional track record along with its ability to expansion in Asia, as claimed in Bloomberg News reports of this month.

Birkenstock has been planning its expansion in India for quite a long time and has already launched its brand stores and mono-brand stores in several Indian states like Delhi, Chennai, Hyderabad, Mumbai, and Bengaluru.

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