H&M has announced plans to close around 250 stores globally next year, as the Swedish retailer looks to bolster its online presence following a slump in bricks-and-mortar sales during the pandemic.
The announcement comes on top of the 50 H&M stores already permanently shuttered this year, and will likely add to the “tens of thousands” of layoffs mulled at the start of the pandemic.
The world’s second-largest clothing brand, which employs around 180,000 people worldwide, today said profit in the three months to the end of August more than halved year-on-year to Skr1.8bn, down from SKr3.8bn in 2019.
The fashion brand was forced to close the majority of its stores at the outbreak of the pandemic, as national lockdowns swept across the globe. Around 900 of its physical stores were still closed at the start of the quarter, with sales down five per cent year-on-year in September.
H&M has since reopened the bulk of its retail stores, while around 166 remain closed and many have limited opening hours.
Pre-tax profit for the quarter came in at SKr2.3bn, above analysts’ expectations of SKr2bn guided last month.
Chief executive Helena Helmersson, who joined the group in January, said: “Although the challenges are far from over, we believe that the worst is behind us and we are well placed to come out of the crisis stronger”.
The company has set out plans to lower costs by renegotiating rental costs, with H&M’s lease agreements structured so that the retailer can renegotiate or exit one quarter of its leases in any given year.
Investors were cheered by the retailer’s proposals to slim down its high street presence, with shares up 6.9 per cent in early trading.