LONDON, United Kingdom — H&M group has temporarily shuttered stores across large parts of Europe, as governments take extraordinary measures to try and contain the escalating coronavirus pandemic.
The closures signal more pain ahead for retailers, already suffering the aftershock of a widespread shut down in January and February across China, the first country hit by the outbreak.
H&M group said overall sales still rose 5 percent in local currencies in the period from 1 December to 29 February. In China, sales were trending up 27 percent year-over-year, but after a spate of store closures beginning late January, sales plummeted. Overall, sales in China were down 24 percent in the first quarter. At its peak, the company shut 334 out of the group’s 518 stores in the country — a stark warning of what may be about to play out elsewhere.
As the pandemic continues to spread, governments are taking extraordinary measures to try and contain the virus. A growing number of cities and countries are on lock down, with only essential stores allowed to remain open.
Over the last few days, H&M group said it has temporarily closed all stores in Italy, Poland, Spain, the Czech Republic, Bulgaria, Belgium, France and parts of Greece. As of Monday it will also close all stores in Austria, Luxembourg, Bosnia-Herzegovina, Slovenia and Kazakhstan. Meanwhile, the company said sales in China have gradually started to recover.
The crisis comes at a delicate time for the fast fashion giant. H&M group is in the middle of a years-long turnaround effort that is just beginning to bear fruit. In January, the company reported its first rise in annual profit since 2015 and named company veteran Helena Helmersson CEO.
Since then, global events have moved rapidly. Retailers are grappling with how to manage the mounting health crisis and the associated disruptions to day-to-day business, supply chains and consumer sentiment. H&M group will provide further updates April 3 with its quarterly report.
“All activities in the company are now being carefully evaluated — including from a cost and risk perspective — so as to be able to mitigate the negative effects associated with the virus as far as possible,” the company said in a statement.
We’re tracking the latest on the coronavirus outbreak and its impact on the global fashion business. Visit our live blog for everything you need to know.