H&M Says Nearly 70% Of Its Stores Are Closed, Considers Mass Job Cuts
- Fashion retailer says almost 70% of 5,000+ stores worldwide is closed due to the coronavirus outbreak
- H&M previously announced it is closing its stores in key markets, including United States, United Kingdom and Germany
- The company is considering temporary layoffs that are likely to affect “tens of thousands of staff”
Fashion retailer giant H & M Hennes & Mauritz AB, better known as H&M (STO:HM-B), said it is considering laying off tens of thousands of staff due to the coronavirus pandemic.
The Sweden-based retailer said in a press release that nearly 70% of its 5,000+ stores worldwide are closed, while those stores are open have recorded “subdued demand”. The company operates in 74 countries across the globe.
H&M has been forced to close stores in its biggest markets, including Germany, United Kingdom and United States. As a result, these actions have had a negative impact on the sales so far in March, the company said.
“The company is therefore reviewing all parts of its operations, including all costs. Several measures are being taken in respect of buying, investments, rents and staffing, among other areas. The situation is being reviewed market by market based on local conditions.”
Moreover, H&M is considering temporary layoffs in certain markets, which are “likely to affect tens of thousands of employees in all parts of the business, although it is not currently possible to specify the exact number”.
H&M employs more than 125,000 employees worldwide.
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Helena Helmersson, CEO of the company, said that the company is forced to make “difficult decisions”, given that it operates in “an extraordinary situation”.
The company has also cancelled plans for dividends, the company said. Previously, H&M announced it aims to pay SEK9.75 ($US 0.95) per share to its shareholders.
“I am convinced that this is the best decision in this situation in order to further strengthen the company’s already strong financial position and thereby secure our freedom of action going forward,” said Stefan Persson, chairman of the board.
H&M is expected to report the next quarterly earnings report on April 03. In January, H&M reported that its gross profit rose 9% compared to a year ago while the fourth-quarter profit after tax jumped nearly 20%.