Company Insight

H&M, one of the world's leading fashion retailers, has consistently adapted to market developments. The company’s growth trajectory further becomes evident when taking a look at the number of countries where the brand operates with both physical and online stores, compared to those with physical stores only.

H&M's Offline vs. Hybrid Model: A Timeline

When analyzing the data, the trend towards an increasing adoption of the hybrid model comes to surface:

The data shows that H&M has continued to expand its online retail business into new markets, while its physical stores are experiencing a downturn. In total, the number of countries where H&M operates has increased from 53 in 2013 to 77 in 2023.

The decline of physical stores in combination with the growth of the company's online presence underscores H&M's commitment to catering to the changing preferences of global consumers. While in 2013, an overwhelming majority of 83% of H&M’s target markets operated in physical retail exclusively, this ratio shifted ten years later. Today, 78% of the countries in which H&M operates have both offline and online H&M stores.

Number of Physical H&M Stores Shrinks – an eCommerce Paradigm Shift?

Despite the worldwide shift to online, H&M continues to be a strong physical fashion retailer and brick-and-mortar remained an important pillar in the company’s multichannel business concept alongside the eCommerce boom. But more recent developments raise questions:

Although H&M increasingly invested in the expansion of its eCommerce business during the early 2000s, brick-and-mortar remained equally important on the agenda. A look at the development of physical H&M stores reveals a constant increase well into 2019. The number of H&M brick-and-mortar stores grew quite steadily by around 10% to 12% each year since 1998.

But the trend has apparently come to an end. Since 2019, the number of physical H&M stores has gone down each year to currently 3,893 stores – 599 stores less than in the peak year 2019. It might not be a coincidence that 2019 was the peak year for the number of offline stores, as the Covid-19 pandemic with its unprecedented eCommerce boom broke out in 2020. But even after the end of this global health crisis, H&M's physical store presence continues to decline.

H&M’s Retail Strategy Continues to Rely on Omnichannel

H&M's approach to retail expansion reflects its commitment to meeting evolving consumer needs. By maintaining a global network of physical stores and simultaneously investing in online retail, the brand ensures that customers can engage with H&M in a way that suits their preferences.

According to the company, a well-established omnichannel approach including website sales, physical stores, marketplaces, social media and more is key to their future vision. The company plans to close more physical stores in established markets but open new brick-and-mortar locations in growing economies to ensure a well-established store portfolio in each target market.