H&M Closing Stores to Focus on Digital Integration
H&M will close around 250 store next year, the apparel retailer revealed, as it navigates the new COVID-challenged landscape.
Though the company, which operates around 5,000 stores worldwide, returned to profitability in its fiscal third quarter, it reported a net sales decrease of by 16%. September sales were down 5% year over year.
Store closures will primarily take place in the United States and Europe, while it will continue to explore opening new stores in Russia, Japan, South Korea and Eastern Europe.
The fleet optimization is being completed as part of its efforts to better meet the needs of today’s new consumer, along with increasing its digital investments and further integrating its digital and physical retail sales channels.
“We clearly see that customers want to meet us in both channels and in different channels, so our agenda to continue to integrate the channels going forward is really, really clear to us,” said CEO Helena Helmersson in an earnings call. “Part of that is obviously to optimize then the store network, and we will continuously then develop our stores, as we have always done.”
She noted that how this plays out will be an ongoing process. “At the same time, of course, we work on growing digitally and in our online channels, but again, back to the importance of integrating the channels.”
Store size hasn’t necessarily impacted the decision on which locations to lose, said H&M head of investor relations Nils Vinge. “We look at each store always in a holistic view when we do the store optimization, looking at online, looking at brands, looking at stores, and then the decision might differ a lot from store to store. So it's not about size, it's more about how the store fits in the total picture.”