“Solid growth" at Hema thanks to online burst

“Solid growth" at Hema thanks to online burst
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Dutch retailer Hema saw strong online sales increase its third quarter turnover by more than 4 %. The chain also intends to conclude more partnerships in the coming years.

 

Clothing and household goods

In the third quarter of 2019, Hema recorded sales of 317.2 million euros, an increase of 4.2 % compared to the same period last year. On a comparable basis, growth was 2.7 %. The Dutch retail chain sold more clothing (+ 5.3 %) and household items and personal care products (+ 4.8 %).

 

Outside of the Netherlands, the strongest level of growth was achieved in Germany (+ 16.1 %), followed by Belgium and Luxembourg (+ 3.4 %). The increase in sales was primarily the result of increased online sales and an increase in the number of store openings.

 

Online sales boom

Hema mainly grows online: e-commerce revenues increased by 34.6 %. Country manager Belgium, Carla Velghe, said in an interview with RetailDetail that online sales are booming so much that many shops can hardly handle it anymore, due to a lack of storage space. According to the retail chain, these online activities have now been profitable for two years.

 

Gross operating profit (EBITDA) in the third quarter amounted to 60.6 million euros, partly as a result of the new IFRS 16 accounting standard. Without taking this into account, the EBITDA would be 29.5 million euros, making it 5.4 % higher than a year ago. Below the line, there was a loss of 1.4 million euros.

 

Collaboration

"We are pleased with our results in the third quarter. We have shown, for example, solid like-for-like sales growth. Despite the strong competition, we have grown much faster online than the online market. [...] We can also see that our partnerships with Franprix and Wehkamp are beginning to bear fruit and that they are starting to contribute to our results", CEO Tjeerd Jegen said.

 

Jegen wants to further develop partnerships, such as the one with Jumbo, in the coming years. This makes it possible for the retail chain to continue growing with significantly lower investments. "At the same time, it contributes to the realisation of our ambition to make Hema a global brand", the CEO concludes.