Global retailer H&M has witnessed a 57 per cent slump in its sales during the period 1 March to 6 May (in local currencies) compared to what it was during the same period in 2019.
Here it is important to note that online sales – open in 46 of the company’s 51 online markets – increased by 32 per cent during the same period.
Italy was most affected as it witnessed 80 per cent fall, while Spain saw its sales go down by 76 per cent. Both US and France noticed 71 per cent fall during the said period.
All major markets that include the likes of Sweden, Germany, US, China, Italy, Japan, Norway, Denmark and France are down (maximum 80 per cent and minimum 11 per cent).
Around 80 per cent of H&M Group’s stores have been closed since mid-March and from April-end onwards, the Group started gradually re-opening stores in a number of markets. Currently 3,050 stores out of 5,061 stores are still temporarily closed.
Re-opening of stores in each market is in line with local restrictions and rules on social distancing. In those markets that have begun to open up, trade in the stores has initially been muted.
The retailer claims that costs for markdowns are expected to decrease in absolute figures in the second quarter compared with the second quarter of 2019, but since sales will be significantly lower the markdowns are expected to have a negative impact on the gross margin of 2 to 4 percentage points.
The assessment based on current information is still that operating expenses excluding depreciation and amortisation will be reduced by approximately 20 to 25 per cent in the second quarter compared with the corresponding quarter 2019, though the Group claims the liquidity to be good.