- Prachi Singh |
The H&M group’s total sales during the period March 1 to May 6 this year decreased by 57 percent in local currencies compared with the same period in 2019. Online sales, the company said in a statement, which are open in 46 of the company’s 51 online markets, increased by 32 percent in the same period.
Around 80 percent of the group’s stores have been closed since mid-March. However, from the end of April onwards the H&M group started gradually reopening stores in a number of markets. In those markets that have begun to open up, the company added that trade has initially been muted. At present 3,050 stores, representing 60 percent of the group’s 5,061 stores, are still temporarily closed.
H&M said, to offset the negative sales development, a range of rapid and forceful measures are being implemented in the areas of purchasing, investments, rents, staffing and financing. Costs for markdowns are expected to decrease in absolute figures in the second quarter but since sales will be significantly lower the markdowns are expected to have a negative effect on the gross margin of 2 to 4 percentage points.
The company forecasts, second quarter will be loss-making since the measures implemented will not compensate for the substantial drop in sales. The group is working to secure additional credit facilities.
Picture:H&M media gallery