H&M falls 8% to lowest since December 2008

[LONDON] The last time H&M was this low, global financial markets were in crisis, Angelina Jolie was popularising the maxi dress and Zara didn't even sell clothing online.

The stock fell as much 8 per cent on Wednesday to the lowest since December 2008 as the fashion retailer's sales slump showed no sign of easing.

A 1 per cent increase in December and January sales implied a "mid-single digit" drop in like-for-like revenue, according to RBC analysts, bearing out comments by chief executive officer Karl-Johan Persson that the first quarter started weaker than expected. That follows the biggest drop in quarterly sales in at least a decade.

The magnitude of the sales decline "has led to a potential change in the business model", according to Raymond James analysts, with H&M set to accelerate its digital transformation, shut 170 stores this year and add a new format selling marked-down merchandise.

Investors will next get an insight into the unloved stock on Feb 14 when H&M holds a capital markets day.

BLOOMBERG