H&M plans to close hundreds of stores. The fast-fashion group wants to have 250 fewer stores by the end of next year, even though the retailer believes that the worst of the corona crisis is behind us.
Potentially even more closures
The corona pandemic caused sales figures to plummet and has accelerated the shift to online. That is why H&M will close hundreds of stores next year: in 2021 the fashion retailer wants to have 250 fewer physical stores than today, which means a 5% reduction of the entire store network. This means that more than 250 stores will close, because if new stores open somewhere, others will have to close elsewhere to compensate.
H&M has been trying to downsize its physical network for a number of years, closing more stores and opening fewer new ones. The retailer said earlier this year, according to Reuters, that its net number of stores would fall already in 2020. Now, however, the Swedish company is taking more drastic measures.
Despite a better-than-expected recovery
The announcement is striking because it is accompanied by optimistic quarterly figures. Top woman Helena Helmersson says in a press statement that there was a clear further recovery in September: sales in local currency fell by 5%, while in the three months to August there was still a 19% drop. "Although the challenges are far from over, we believe the worst is behind us and we are well placed to come out of the crisis stronger," she says.
Analysts also agree that the figures are evolving better than expected. Pre-tax profits in the third quarter stood at 2.37 billion Swedish krona (230 million euros), compared to 5.01 billion krona (480 million euros) a year earlier. This is reassuring, taking into account that in the quarter from March to May, the operating result fell sharply below zero as sales also halved. H&M is now "very well on track" in its turnaround, says Helmersson.