H&M Will Be Closing 160 Of Its Stores This Year
The Swedish fast-fashion retailer made headlines for having one big problem — H&M was sitting on an excess of $4 billion worth of product. A snag in supply and demand led to incredibly bloated inventories, and H&M has been trying to catch up ever since.
In an effort to combat the issue, H&M has been reevaluating its entire business.
One of the first efforts the company made was pulling the plug on one of the brands under its banner: Cheap Monday. In November 2018, the retail company announced that it would shutter the brand and that it would be shut down completely by the end of June 2019.
While analysts believe that H&M made the correct decision in shutting down the brand, they are still concerned that its other non-flagship banners — such as Afound, Arket, and Nyden — are “too small to have much impact on sales.”
In a press conference this week, H&M announced some big changes coming down the pipe.
At the end of the company’s fourth quarter, numbers show that H&M’s efforts weren’t for naught. Overall, the company saw net sales rise by 12% and online sales rise by 24%. The company’s Q4 success is attributed to stronger collections that helped sell products at full price, resulting in lower markdowns and an improvement in inventory.
In the same press conference, H&M announced some of its initiatives for the new year. There are plans for improvements across technology and product flow, but more interestingly for consumers, to customer offerings.
On the consumer side of things, shoppers can expect to see upgrades to H&M’s online store, as well as its mobile app. The company will focus on better integrating its physical stores with online by rolling out a “click-and-collect” program, allowing online returns in store, opening up “scan-and-buy” in 47 markets, and expanding its in-store-mode and find-in-store to more markets.
H&M also has plans to close 160 stores internationally.
In 2019, H&M plans on opening a total of 335 new flagship and non-flagship banner stores. However, the company also plans to close 160 stores and renegotiate 1,000 store contracts. In the grand scheme of things, 160 store closures isn’t too big of a deal for the Swedish retailer. If all goes to plan, H&M will have a net of 175 new stores in 2019 — the company says it’s shifting its focus towards growth markets in order to optimize its store portfolio.
While it wasn’t revealed if store closures will be happening in Toronto, or Canada as a whole, H&M’s Bloor St. location is currently up for lease on the Urban Retail Toronto website. There are a lot of changes planned for the Mink Mile area and H&M’s evacuation is rumoured to be one of them. The listing states that the space will be available February 2020 or earlier, which suggests H&M could be exiting the space in the near future.
For now, nothing is certain about H&M store closures in Canada, but we’ll keep you updated as news progresses.
Featured image: Instagram/@vincemto
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