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H&M to Close Handful of Aussie Stores in Favour of Online
H&M is planning to close a handful of stores across Australia as its online offering continues to expand.
The Swedish fast-fashion retailer launched its e-commerce platform in late 2020, after years of pushing the launch back.
According to a report from The Australian, the retailer plans to close up to 15 percent of its Australian stores, in an effort to further push its online offering. H&M has denied these reports but has confirmed it will close three stores.
The stores that are planned to shut include H&M Townsville, H&M Rockhampton and H&M Chatswood. The latter shut its doors in January.
“While we acknowledge the impact this will have on our colleagues as well as local communities, we see these store consolidations as vital in ensuring the long-term growth and success of the company,” a spokesperson told AFR.
“It is part of our daily business to always make sure that we have the best location, the best business deal and optimise our store portfolio.”
The closure of stores is not exclusive to Australia. Globally, the retailer shut 58 stores, with the profit-plummeting pandemic as the catalyst.
Furthermore, the retailer confirmed it would be closing 250 stores around the world, but will open another 100 in developing markets.
Sales in Australia slipped by 18 percent over the last 12 months ending November 2020. This pulled profits down by 88 percent.
H&M launched its online store in October 2020, after seven years of promising to enter the e-commerce market in Australia.
“We are very excited to finally launch H&M online in Australia and to be able to offer our fashion collections to customers nationwide anytime, anywhere. We now have 40 stores across the country and this significant milestone extends H&M’s omnichannel offering,” said Tomas Coellner, the Country Manager of H&M Australia, at the time of its online launch.
“With strong, profitable online growth and good cost control we succeeded in ending the year in profit and with a strong financial position,” said Helena Helmersson, the CEO of H&M Group in January.
At the height of the pandemic, up to 80 percent of the retailer’s 5,000 stores were shut temporarily. During the second wave of the pandemic, 1,800 stores had to temporarily shut worldwide. This resulted in a net sales drop of 23 percent between December and January.
Power Retail has reached out to H&M for comment.