H&M recognised "weather conditions" as key sales risk in annual report

Signal of change / H&M recognised "weather conditions" as key sales risk in annual report

By Jiehui Kia / 16 May 2018

Conversations on sustainable fashion tend to focus on socially and environmentally responsible practices by fashion brands, in response to customer and consumer expectations. The direct impacts of climate change on business and financial performance are given less attention. In its 2017 annual report, H&M group formally recognised "weather conditions" as a key risk to the operating performance of the group, particularly affecting sales: 

"The H&M group’s products are purchased for sale based on normal weather patterns. Deviations from normal weather conditions affect sales. This is particularly true at the transition between two seasons, such as the transition from summer to autumn or from autumn to winter. If the autumn is warmer than usual it may have a negative effect on sales of weather-related garments in particular, such as outerwear and chunky knitwear." (Page 66, H&M Annual Report 2017) 

So what?

With our weather becoming increasingly erratic it comes as no suprise that it has affected our fashion choices, impacting the financial performace of major fashion brands as a result. What remains to be seen is how H&M intend to mitigate these risks, and are consumers going to be adversely impacted as a result?  

Resource links:

What might the implications of this be? What related signals of change have you seen?

Please register or log in to comment.