H&M closes 170 Stores


Photo courtesy of: CNN

Jazmin Velenczei, Staff Reporter

H&M announced that it is closing 170 stores by the end of 2020, 40 more than it had in the first place planned after reporting a 50% drop in net sales during the second quarter of this year. In addition to this, H&M will be cutting back on store openings in 2020, resulting in a net decrease of 40 stores.

H&M is ramping up the pace of store closings this year as it shifts focus to its online business to reflect changing consumer shopping habits in the wake of the coronavirus pandemic. In June, the fast-fashion giant reported sales results for the first time in 2020. Net sales were down 24% in local currencies between December and May, and 50% during the second quarter because the majority of its stores were closed during the lockdown. On the other hand, online sales across its brands were up 32% in local currencies between March and May. 

The company said it is taking action to trim its stores at a faster pacer, closing 170 stores this year and cutting back on new store openings. It is doing so because it expects the pandemic to have a long-lasting effect on shopper behavior and to see more sales shift online. 

H&M is not the only one placing greater emphasis on online sales post-COVID. Inditex, which owns Zara and Massimo Dutti among other brands, announced earlier that it is also closing 1000 stores over the next two years.

Analysts are also expecting the pandemic to have a lasting impact on the way people shop and online shopping. Some advantages of online shopping are convenience, better prices, sometimes more variety, and less contact with your community. Because of these advantages, a lot of consumers started shopping online instead of going to a store, which explains why H&M’s closing stores.