H&M to close hundreds of stores as online shift accelerates, Retail News, ET Retail

H&M to close hundreds of stores as online shift acceleratesSTOCKHOLM : H&M plans to shut hundreds of outlets next year as the coronavirus disaster drives additional shoppers online, the world’s next largest fashion retailer reported on Thursday, immediately after reporting a more compact than anticipated drop in third-quarter revenue.

H&M, which in excess of decades expanded its community of stores around the planet, will purpose to reduce their quantity by a internet 250 next year, representing 5{cbf6da10fac2230370cea9448ed9872290737d25c88b8c8db3eefaf8c399e33d} of its latest community.

H&M has been shutting additional outlets and opening much less in excess of the past couple of years as it adapts to the online change that is driving additional competitors. The retailer reported before this year its internet quantity of outlets would drop currently in 2020.

The corporation also reported gross sales experienced ongoing to recover in September from the effect of the virus.

Chief Government Helena Helmersson reported: “Though the problems are much from in excess of, we imagine that the worst is driving us and we are well put to come out of the disaster more robust.”

Rival fashion retail groups have also noticed a restoration, with industry chief Inditex, the operator of Zara, reporting a return to revenue in its Could-July quarter.

“Total, Q3 is a improved quarter than anticipated and we think H&M ongoing to deal with well what they could immediately influence,” analysts at JPM reported in a observe.

“We think that the industry is even now not totally appreciating the enhanced high-quality of H&M business product and infrastructure. We think alternatively that this set of effects is more evidence that H&M turnaround is even now very considerably well on observe.”

H&M’s shares ended up up 6.{cbf6da10fac2230370cea9448ed9872290737d25c88b8c8db3eefaf8c399e33d} at 0804 GMT.

The Swedish firm’s pretax revenue fell to two.37 billion crowns ($265.6 million) in its fiscal third quarter, from a year-before 5.01 billion. Analysts polled by Refinitiv experienced on ordinary noticed a two.03 billion crown revenue.

H&M experienced currently flagged that the revenue would land at around two billion crowns helped by price cuts as it recovered additional speedily than anticipated.

In the March-Could quarter, the pandemic experienced pushed H&M into a steep reduction, its first in a lot of decades, as gross sales halved.

H&M reported its September gross sales ended up down 5{cbf6da10fac2230370cea9448ed9872290737d25c88b8c8db3eefaf8c399e33d} year-on-year in area currencies immediately after they fell 19{cbf6da10fac2230370cea9448ed9872290737d25c88b8c8db3eefaf8c399e33d} in the 3 months through August.

Of additional than 5,000 outlets all over the world, three{cbf6da10fac2230370cea9448ed9872290737d25c88b8c8db3eefaf8c399e33d} keep on being briefly shut towards around eighty{cbf6da10fac2230370cea9448ed9872290737d25c88b8c8db3eefaf8c399e33d} at the top of lockdowns, it reported.

H&M, which has struggled for years to end a increase in inventories, reported individuals ended up unchanged from a year before. Markdowns elevated half a proportion point, and H&M predicted they would increase one-one.5{cbf6da10fac2230370cea9448ed9872290737d25c88b8c8db3eefaf8c399e33d} in the latest quarter.