H&M to close hundreds of stores as online shift accelerates
Retailer’s pretax profit falls to €226m in third quarter as group recovers
H&M said it plans to close hundreds of stores worldwide next year as the coronavirus crisis drives more shoppers online. Photograph: Paul Hanna/Bloomberg
H&M plans to close hundreds of stores next year as the coronavirus crisis drives more shoppers online, the world’s second biggest fashion retailer said on Thursday, after reporting a smaller than expected drop in third-quarter profit.
H&M will aim to cut their number by a net 250 next year, representing 5 per cent of its current network. The chain has 16 stores in the Republic.
H&M has been shutting more stores and opening fewer over the past couple of years as it adapts to the online shift that is driving more competition.
The company also said sales had continued to recover in September from the impact of the virus.
Chief executive Helena Helmersson 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.”
“Overall, Q3 is a better quarter than expected and we think H&M continued to manage well what they could directly influence,” analysts at JPM said in a note.
The Swedish company’s pretax profit fell to 2.37 billion crowns (€226 million) in its fiscal third quarter, from a year-earlier SKr5.01 billion. Analysts polled by Refinitiv had on average seen a SKr2.03 billion profit.
H&M had already flagged that the profit would land at around SKr2 billion helped by cost cuts as it recovered more quickly than expected.
H&M said its September sales were down 5 per cent year-on-year in local currencies after they fell 19 per cent in the three months through August.