H&M struggling to match the growth of it’s fast fashion peers

The Swedish fast fashion giant H&M has recovered back to sales growth after the pandemic. However, H&M has not been able to bounce back as fast as it’s main competitor Inditex. Where Inditex has had annual growth of 20-40% per quarter, H&M’s growth has plateaued to below 10% for the last two quarters.

The sluggish growth is most obvious when compared with the pre-pandemic sales levels. Index has been able to grow over the two year comparison numbers for two quarters, whereas H&M is -8% to 2019 levels.

Index of sales development by the three major fast fashion retailers (2011=100)

Another challenge for H&M is the rapid growth of the Japanese fast fashion retailer Fast Retailing (featured in a previous post here), which has since 2011 grown significantly more rapidly than either Inditex or H&M. Of the three H&M has been the most sluggish in growth. Currently Fast Retailing’s revenue is approximately 87% of H&M’s revenue.

When speaking of the challenge from Asia, Shein is the next one to challenge all of the three major fast fashion players. And that challenge will most probably be fast and disruptive…