H&M profit lags under cost of online investment

H&M has invested heavily in its online operations since launching a U.S. shopping site just last year. The retailer, which announced fourth quarter earnings Thursday, said e-commerce operations have weighed heavily on earnings.

Although H&M's online expansion caused a big hit in earnings, the retailer will launch e-commerce activities in China, an important market where it has 228 stores.

The company reported that profit rose 8.7 percent to 3.5 billion kronor ($526 million), though the increase would have been 14 percent without the cost of long-term investments, which include the costs of operating online.

H&M has had a tough start in e-commerce as it tried to recover from a late entry and slow start in internet sales. After finally launching an online store in the U.S. in the summer of 2013, H&M announced the launch of e-commerce in France on Monday, which also seems long overdue. France is the 10th market in which H&M launched e-commerce after Sweden, Denmark, Norway, Finland, Germany, Austria, the UK, the Netherlands and the U.S.

Looking ahead, H&M is planning to expand its online presence even further. China, Spain and Italy are next on the list to receive an e-commerce site by the end of the year.

In 2013, H&M passed the 3,000 mark in terms of stores around the world and plans a further 375 in 2014, including outlets in new markets such as India, the Philippines and Australia.

For more:
-See this Bloomberg article
-See this Wall Street Journal article

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