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H&M Plunges Most in 16 Years After Trouncing by Rival Zara

  • Sales surprisingly decline as Inditex reports 13% growth
  • H&M to close stores as it expands China online pact with Tmall
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Here's Why H&M Shares Are Plunging

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Hennes & Mauritz AB shares plummeted after the Swedish apparel chain lost more ground to Inditex SA’s Zara, amid a crisis in brick-and-mortar stores that threatens to undermine retailers with underdeveloped online businesses.

H&M reported the biggest drop in quarterly sales in at least a decade Friday as fewer customers visited its flagship brand’s locations, leading the company to pare expansion plans and consider closures. The stock fell as much as 16 percent, the steepest intraday decline since March 2001. H&M is attracting short selling, which peaked in the stock recently.