H&M To Shutter 250 Stores As Losses Mount

Words by Retail Bum

H&M To Shutter 250 Stores As Losses Mount
H&M To Shutter 250 Stores As Losses Mount

Fast fashion brand H&M plans to shutter as many as 250 stores next year, with about a quarter of its leases up for renewal and renegotiation. 

The company’s decision to reduce its footprint comes at a time when its net sales have seen a 16 percent decline, reaching $5.7 billion. These losses were largely a result of the impact of the COVID-19 pandemic, which forced the company to shutter its brick and mortar store locations that have long been a revenue driver for the apparel and accessories retailer.

As H&M works on shuttering its physical stores, the company said it was making investments in improving its digital offerings and facilitating an omnichannel shopping experience that meets the changing needs of consumers.

“More and more customers started shopping online during the pandemic, and they are making it clear that they value a convenient and inspiring experience in which stores and online interact and strengthen each other,” said H&M’s CEO Helena Helmersson.

The company is also making efforts to offer more sustainable products as consumers are now preferring to shop with environmentally conscious brands — a move that is being emulated by several brands in the retail space. 

“Demand for good value, sustainable products is expected to grow in the wake of the pandemic and our customer offering is well-positioned for this. We are now accelerating our transformation work so that we continue to add value for our customers,” Helmersson added.

The company’s move to focus less on its brick and mortar sales marks a significant departure from its existing strategy, which was primarily centered around its physical footprint. 

At the start of the quarter, approximately 900 of the company’s more than 5,000 stores were temporarily closed, however, which resulted in big losses and has since prompted the company to focus more on digital sales. 

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