Yahoo Finance H&M to close 240 stores as it targets new markets overseas
H&M (HM-B.ST) plans to shut 240 stores this year and open 95 new spaces as the fashion retailer targets new markets like South America.
The fast fashion giant reported a sudden slowdown in sales after it halted operations in Russia due to the invasion of Ukraine.
Read more: H&M sales grow 23% in first quarter
The company paused all sales in Russia, Belarus and Ukraine, affecting 185 stores, earlier this month and also stopped online sales in Russia.
Russia is H&M’s sixth biggest market, representing 4% of sales, and the halt to operations in the region comes amid a continued boycott in China, previously one of its biggest markets, after it raised concerns over cotton sourced from the Xinjiang region.
Global sales rose 6% in March, compared with 23% growth in the three months to February, but these figures were still down 11% from two years earlier, just before the pandemic hit.
H&M also revealed it swung to an operating profit of 458 million Swedish krona (£37.5m) for the quarter to February as it was boosted by a rise in full-price sales.
It highlighted that it was still nonetheless impacted by the spread of the Omicron variant of coronavirus during the period and was “impacted by extensive restrictions” in some countries.
Read more: Primark sales set to surge 60% as lockdown fades
The Swedish retailer said this year it plans to open around 95 new stores and close around 240 stores, making a net decrease of around 145 spaces. “Most of the openings will be in growth markets, while the closures will mainly be in established markets,” it added.
This year H&M will launch in six new markets, with Cambodia having already opened in March via franchise. The other new H&M markets in 2022 will be Ecuador, Kosovo and North Macedonia, and via franchise Costa Rica and Guatemala. In 2023, it plans to open its first store in Albania.
Watch: The risks of buying now and paying later
