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*H&M’s profits have reportedly plunged following the controversy surrounding its racist monkey hoodie ad.
The Swedish fashion retailer was forced to appoint a diversity leader following the outcry over its ad that showed a black boy dressed in a hoodie with the words “coolest monkey in the jungle.”
Back in January, the retailer said on Facebook that it’s “commitment to addressing diversity and inclusiveness is genuine, therefore we have appointed a global leader, in this area, to drive our work forward.”
But in the months following #Hoodiegate, H&M’s earnings have taken a huge hit. The world’s second-largest clothing retailer has piles of unsold clothes worth more than $4 billion after, Bloomberg reported.
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A Huge H&M Sale Might Be Coming Thanks to $4.3 Billion in Unsold Clothes https://t.co/uAIm6On07W
— ELLE Magazine (US) (@ELLEmagazine) March 29, 2018
Meanwhile, industry analysts blame discount sales and an usually cold winter for hurting H&M. Despite a series of widespread markdowns, the clothing chain is struggling to sell extra merchandise — including months-old Halloween costumes and Christmas sweaters. It seems the once popular fashion brand is feeling the sting of “changing consumer tastes and increasing competition,” per the Washington Post.
“The rapid transformation of the fashion retail sector continues,” H&M chief executive Karl-Johan Persson said in a statement. “The start of the year has been tough. Weak sales combined with substantial markdowns had a significant negative impact on results in the first quarter.”
Sales are slipping, profits are down to their lowest level in 16 years, and inventory is way up, H&M parent company Hennes & Mauritz said Tuesday, according to the report.
H&M employs 171,000 people worldwide in its 4,700 stores. It has outlets in 69 countries, with the US, Germany and the UK its top three markets by number of stores.
H&M’s profit fell 62% in the first quarter after it accumulated a record pile of unsold clothes #tictocnews https://t.co/sitIiDIc8J pic.twitter.com/YKg25NBdY1
— TicToc by Bloomberg (@tictoc) March 27, 2018
The retailer said it expected sales and profits to return to growth. “We take a long-term view that, together with our knowledge and experience enable us to navigate through times such as this… back to healthy growth in both sales and profitability.”
Discount sales and an usually cold winter is hurting H&M. The clothing-retail brand has piled up $4.3 billion worth of unsold inventory pic.twitter.com/o82ZuuGl5L
— TRT World (@trtworld) March 30, 2018
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