Swedish fashion brand H&M reported a plunge of 46 per cent in March sales as the COVID-19 pandemic impacted the business.
The brand also said that it is expecting to run a loss in its fiscal second quarter.
H&M has temporarily shut 3,778 of its 5,065 stores as of the end of March, and has flagged big layoffs and scrapped its annual dividend for the first time since its 1974 listing in the wake of this outbreak.
Reportedly, the brand said “The second quarter will naturally be very negatively impacted by the Coronavirus situation and will therefore be loss-making.”
H&M has confirmed that it has prepared a number of sources of financing in order to strengthen its liquidity buffer and is expecting to finalise them in the second quarter.
The firm said that it expects to cut operating expenses, excluding depreciation and amortisation, by around 20 to 25 per cent in the second quarter. It also slashed its planned capital spending for this year to 5 billion crowns from the previous 8.5 billion.
Fiscal first-quarter pretax profit which was 1.04 billion crowns a year ago more than doubled to 2.50 billion crowns.
Meanwhile, the Group also said that it was in talks with its staff about shortening working hours in view of the pandemic.
“The spread of COVID-19 has caused an exceptional situation and the H&M group is forced to make several difficult decisions. Dialogue with employees on temporarily shortened working hours affecting tens of thousands of employees globally has been initiated in several markets. It also concerns officials at central functions,” a company spokeswoman said in a statement.
