“Raking in Billions Annually in Vietnam, H&M Sets Sights on Expanding in the Country’s Wealthiest City”

H&M’s Ambition: 20 Stores in Vietnam

On the afternoon of September 4, Ho Chi Minh City’s Vice Chairman Nguyen Van Dung received Mr. Saed El-Achkar, Chairman of East Asia, H&M Group (Sweden).

At the meeting, the Chairman of H&M East Asia expressed his desire to explore the possibility of expanding H&M’s retail chain in Ho Chi Minh City. He also inquired about the procedures related to renting locations and opening new stores in the city center.

H&M is one of the world’s leading fashion retail groups, headquartered in Stockholm, Sweden. Founded in 1947, H&M currently operates in over 75 countries and territories with more than 4,000 stores worldwide.

The group has had a presence in Vietnam since 2017, with 14 stores nationwide. They have also been sourcing from Vietnam for almost two decades and currently work with 103 partner factories employing a total of 86,875 workers in the country.

During a meeting with the Vietnamese Prime Minister in June, on his official visit to Sweden, H&M’s CFO Adam Karlsson shared the group’s plan to expand their scale to over 20 stores in Vietnam in the coming years.

However, this number is still modest compared to their presence in other Southeast Asian markets such as Thailand with 33 stores, Malaysia with 45, and the Philippines with 42.

Globally, as of last year, H&M operated 4,369 stores, according to Statista. The United States is their largest market with 509 stores, followed by Germany with 407, and the United Kingdom with 228.

The group also aims to build large recycling complexes in strategic regions worldwide, including Vietnam. Previously, H&M received investment certification from the People’s Committee of Binh Dinh Province (pre-merger) to construct a high-tech polyester fabric recycling plant with an investment of nearly $1 billion and a designed capacity of up to 250,000 tons per year.

The project is expected to be operational by the end of 2028, with the goal of making Vietnam the world’s first center for circular textile recycling, utilizing advanced technology that meets US and EU standards.

Billion-dollar revenue

Since entering Vietnam in 2017, H&M has consistently recorded revenue growth.

According to aggregated data, in their first year in Vietnam (2017), H&M’s revenue was 227 billion VND with a gross profit of 152 billion VND, resulting in a high gross profit margin of 67%. However, their net profit was only 10 billion VND, indicating high selling and management expenses.

In 2018, H&M’s revenue tripled to 763 billion VND, and by 2019, it reached a milestone of 1,116 billion VND. Net profit remained low at 11 billion VND in 2018 and increased slightly to 57 billion VND in 2019.

In 2022, H&M’s revenue in the Vietnamese market surged to 1,396 billion VND, a 66.7% increase compared to the previous year. Their net profit reached over 118 billion VND, an improvement of 46 billion VND from 2021.