A fast-fashion giant is citing increased e-commerce activity and slumping sales for its decision to shutter 250 net stores in 2021.
H&M reported a 16% decline in net sales for Q3 2020, with sales affected by COVID-19. At the beginning of the quarter (June 1, 2020), approximately 900 of the retailer’s more than 5,000 stores were temporarily closed. At the end of the quarter (Aug. 31), just over 200 stores were temporarily closed.
In response to the ongoing COVID-19 situation, H&M says it is “stepping up the pace” of an existing omnichannel transformation plan. This activity includes digital investments, optimization of the store portfolio, and increasingly integrated channels. According to H&M, the plan is gradually leading to increased value creation.
“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 Helena Helmersson, CEO, H&M. “The substantial investments made in recent years have been very important for our recovery and we are now accelerating our transformation work further to meet customers’ expectations. We are increasing digital investments, accelerating store consolidation and making the channels further integrated.”
Around a quarter of H&M’s stores have a contractual right to renegotiate or exit their leases each year, although the retailer has not specified how many of the locations it plans to close will be executing these rights.