On March 24, the well-known fast fashion brand H&M announced in a statement that some markets have launched plans for temporary layoffs, and the company has also decided to suspend its dividend plan.
So far, H&M Group’s temporary layoff plans in Norway and Spain have been exposed by the media, among which Norway The scale of layoffs is about 2,000 people. In Spain, the local “Temporary Employment Regulation (ERTE)” was used to process more than 6,000 employees in 172 stores and the Madrid Autonomous Region Logistics Center.
The group only disclosed in the press release that some markets have begun temporary layoff negotiations, and other markets will follow suit, which may ultimately affect “tens of thousands” of employees in various businesses around the world. Employees have also warned that if the situation does not improve in time, they will not rule out the elimination of a large number of fixed positions.
In view of the current situation and the uncertainty of market development, H&M’s board of directors decided to withdraw its previously proposed dividend proposal of 9.75 Swedish kronor per share (a total of approximately 16 billion Swedish kronor).
The company temporarily closed all stores in several of its largest markets, including Germany and the United States, and over the weekend, all stores in the United Kingdom were also closed. Currently, of the 5,062 stores owned by H&M, a total of 3,441 stores have been closed.
Although there are still 50 regional markets where consumers can shop online through H&M online channels , but the continued weak demand in the market that is still open will have a significant negative impact on H&M’s sales in March.
Faced with declining sales, H&M is trying every way to reduce costs. The company is reviewing all of its operating units. Comprehensive measures are being taken in areas such as sales, investments, rentals and staffing.
Some markets have already started preliminary work on temporary layoffs, and the company said over the weekend that it was repurposing the supply chain to help manufacture protective equipment such as masks.
H&M closes more than 1,000 stores in Germany and the United States
Second in the world H&M, a major clothing retailer and Swedish fast fashion brand, announced on March 17 that due to the spread of the new coronavirus pneumonia epidemic, it would temporarily close all stores in Germany, the United States, Canada, Portugal, and Belgium from the 18th. The company currently has 460 and 590 stores in Germany and the United States respectively, which are the group’s first and second largest markets respectively.
At the same time, the company has closed Poland, Spain, Czech Republic, Bulgaria, Belgium, France, Austria, Luxembourg, Kazakhstan, Switzerland, Greece, Slovenia, All stores in Lithuania, Peru, Ukraine, Philippines, Malaysia and Cyprus. During the closure, customers can still purchase through online channels.
H&M said that the group’s Chinese business has gradually recovered, and 500 of the 516 branches have resumed business.
According to data released by H&M, during the quarter from December 1, 2019 to February 29, 2020, the group’s sales, especially those in the mainland Chinese market, were dragged down by the epidemic. From December 1, 2019 to January 23, 2020, sales in the mainland China market increased by 27% (in local currency). However, after the outbreak, demand dropped sharply, and the overall sales in the mainland China market fell in the quarter. 24%. Of the 518 H&M stores in China, 334 were closed in February.
The group stated that sales in the markets of Hong Kong, Singapore, Macau, Japan, and Taiwan increased by 7% year-on-year (in local currencies) during the quarter.
As the largest clothing retailer in Europe, its brands include H&M, H&M HOME, COS, & Other Stories, Monki, Weekday, ARKET and Afound. H&M currently has approximately 4,900 stores in 74 markets around the world, with 180,000 employees worldwide.
On the same day, German sports brand giant Adidas announced that it would temporarily close all directly operated stores in Europe and North America. According to the plan, European stores will be closed from March 18th to 29th, and stores in the United States and Canada will be closed from March 17th to 29th.
Affected by the new coronavirus epidemic, according to incomplete statistics from Business Insider, more than 30 retailers have announced notices of suspending operations in the United States, including clothing brands Levis, Madewell, and Uniqlo. , Calvin Klein, etc.
Further reading: Zara plans to temporarily lay off 25,000 people
Because Amid the global epidemic, Zara’s parent company Inditex Group’s sales fell 24% in local currencies from March 1 to 16. Inditex Group temporarily closed thousands of stores to help mitigate the spread of the coronavirus.
As of last Wednesday, the fashion giant had closed 3,785 stores in 39 markets. Inditex Group currently has 7,469 stores worldwide. Inditex Group Sales While sales fell 24%, it also bore the wages of approximately 175,000 employees employed in the Chinese market, Russia and the United States.
As China’s economy recovers, IndItex Group said it has begun to reopen in China. The CEO said in a conference call that the group’s online business in China continued to strengthen operations in February, but did not disclose whether sales increased or declined.
At present, except for the 11 stores of Inditex Group in the Chinese market, all stores in China have reopened.
According to Reuters, if the state of emergency in Spain continues beyond April 15, Inditex Group is considering temporarily laying off about 25,000 store employees in Spain. This will be due to One of the largest such initiatives in Europe due to the coronavirus outbreak.
Inditex Group’s financial status, with net cash flow of approximately 8.1 billion euros, will strictly control operating expenses in the future to minimize losses.
In addition, in order to help the Spanish government solve the shortage of medical supplies such as masks and medical protective clothing, Inditex Group plans to convert some fabric production lines into professional medical fabric production lines. </p
