H&M has also been active in the Chinese market for many years. As a fast-moving consumer brand, it and Zara have certain competitiveness in the Chinese clothing market by virtue of their price advantages.
As the world’s second largest fashion chain, Swedish fashion H&M (full name Hennes & Mauritz) announced the closure of 30 physical stores in Spain and the layoff of 1,100 employees due to a sharp decline in performance.
H&M said it will open the collective dismissal procedure ERE. The collective dismissal procedure affects 17% of employees in Spain. The group has There are a total of 155 branches with a total of 6,200 employees. Closing 30 branches is equivalent to laying off 1,100 people.
Previously, H&M Group announced in the second half of 2020 a plan to close a net 250 stores in 2021 to adapt to the digital trend of the retail industry.
Currently, H&M’s net sales as of the first quarter (December 1, 2020 – February 28, 2021) reached 40.06 billion Swedish kronor, and gross profit was 19.057 billion Swedish kronor. Krona, profit after tax was a loss of SEK 1.07 billion, and net sales fell 21%. H&M Group has closed about 20 stores in China.
▲The picture shows an H&M store in Shanghai in March 2021. Due to boycott by Chinese consumers, there were very few customers. (China News Network data map)
H&M’s losses reached 1 billion yuan
Affected by the virus epidemic , H&M’s first quarter (December 2020 to February 2021) financial quarter data, pre-tax loss reached 1.39 billion Swedish krona (approximately RMB 1.04 billion). H&M Group stated that due to the accelerated digitalization process, changes in consumer behavior and the continuous growth of online channels, the retail industry is undergoing major changes, and the company needs to adapt to changing consumer behaviors and needs in order to remain competitive. It is worth noting that in the financial report, the rapid growth of customers in the Chinese market, the company currently has 120 million loyal members in 26 markets. Before the wave of boycotts, in the first quarter as of the end of February, H&M Group’s sales in mainland China surged 21% at fixed exchange rates, with an actual increase of 13% to 2.388 billion Swedish kronor, or about 1.8 billion yuan, leading the gains in major markets.
In addition, H&M was criticized by China for issuing a statement in September 2020 stating that it “does not cooperate with any clothing manufacturing factories located in Xinjiang, nor does it purchase products or raw materials from the region.” Consumer boycott.
H&M has notified the legal representative of the Spanish CCOO union of the collective dismissal decision and is preparing to start dismissal negotiations with the union from April 23. It informed that regardless of the number of people affected and the closure The number of stores is “absolutely disproportionate,” the report said, noting that in addition to closing 30 stores, layoffs will also occur at 94 other stores.
H&M Group owns H&M, COS, Monki, & Other Stories, Arket, Weekday and other brands. The stores that H&M Group will close in Spain this time include 27 H&M stores and 3 COS store. As for the layoffs of employees, H&M Group stated that it intends to retain as many jobs as possible and give priority to employees who voluntarily leave. Currently, most of the Spanish employees of H&M Group are on unpaid leave.
However, the Spanish Workers’ Council (CCOO) believes that it is unreasonable to fire employees who are on vacation. “Although there are indeed changes in consumer behavior that may lead to changes in the workforce, this There is no reason for such large-scale layoffs, especially when the H&M Group has actually profited from the subsidies provided by the Spanish government during the epidemic.”</p
