H&M may shutter 250 stores next year as second COVID wave, lockdown hits sales

H&M, the world’s second-biggest fashion retailer, said on Tuesday that local-currency sales fell 10 per cent in its fourth quarter, with a pronounced slowdown in the final month as the second wave of coronavirus restrictions curbed spending.
The Swedish giant said a recovery seen in the previous quarter had continued through much of the fourth quarter but that sales had been hit again from the end of October.
“Between 22 October and 30 November sales decreased by 22 per cent compared with the corresponding period last year, as the recovery transitioned into a new slowdown as a result of the pandemic’s second wave,” H&M said in a statement.
Sales for the full fiscal year, which runs for the 12 months through November, stood at 187 billion kronor, down 18 per cent.
H&M said that the entire year 2020 was marked by the coronavirus pandemic for the company, one of the world’s largest budget fashion retailers, though the year took off with “a positive momentum.”
“Extensive social restrictions involving temporary store closures and large drops in customer footfall to physical stores led to a substantial decrease in sales, particularly in the second quarter.” A strong sales recovery followed in the third quarter, continuing for much of the fourth quarter before suffering “a new slowdown as a result of the pandemic’s second wave.” The company will report its full fourth quarter and 2020 earnings on January 29.
According to a report by Bloomberg, the Spanish retailer said currently 8% of its stores are temporarily closed, and an additional 10% on weekends. Many also face restrictions on capacity and opening hours. It also said that it will permanently close 250 stores on a net basis next year.