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H&M’s China sales hit as boycott bites

An H&M store in Beijing, China. Shutterstock.
An H&M store in Beijing, China. Shutterstock.

Fashion retailer H&M has taken a sales hit in China in recent months, its latest results showed, after consumers there called for boycotts of foreign apparel brands over past comments they made on alleged human rights abuses in the country’s western Xinjiang region.

Stockholm-based H&M, which counts China as one of its biggest markets for sales — accounting for 5 percent of sales last year — and one of its two biggest purchasing sources, has been singled out in particular. The company was wiped from e-commerce platform Tmall and its store locations from mobile phone maps in China, while its app has vanished from local app stores.

Some researchers and foreign lawmakers say Xinjiang authorities use coercive labour programmes to meet seasonal cotton-picking needs, which China strongly denies.

Following are key milestones in the dispute that has hit the Swedish retail giant:

2016 - Reports begin to emerge alleging human rights abuses in Xinjiang as authorities there expand a network of internment facilities as part of what they say are efforts to combat religious extremism among Uighurs and other mostly Muslim minority groups. Aug 10, 2018 - A United Nations human rights panel says it had received credible reports that 1 million ethnic Uighurs are held in what resembles a “massive internment camp that is shrouded in secrecy.”

Aug 13, 2018 - China rejects the UN panel’s allegations but says that some people underwent re-education after being deceived by extremists.

May 16, 2019 - A Wall Street Journal report names H&M among companies whose supply chains include yarn sourced from Xinjiang. H&M says it would not form any new relationships in the region, the report says.

August, 2020 - The Better Cotton Initiative (BCI), an industry sustainability scheme, says it is temporarily suspending licensing in Xinjiang over forced labour concerns. The statement is no longer available online.

September, 2020 - H&M issues a statement expressing concerns about reports on forced labour, saying it does not work with any factories in Xinjiang, has ensured that its manufacturers do not employ workers from Xinjiang through labour transfer programmes, and no longer sources cotton from the region as it relies on BCI-licensed farms for its Chinese cotton supply, which no longer include producers in Xinjiang.

March 24, 2021 - Chinese consumers and social-media users, including the Central Communist Youth League, excoriate H&M, accusing it of smearing China and calling for a boycott, after its September 2020 statement resurfaces in social media. On the same day, searches for H&M on Chinese e-commerce platforms are blocked.

It was not clear why the old statement re-emerged on social media, although it came days after a coordinated set of sanctions imposed on China by Britain, Canada, the European Union and the United States over human rights in Xinjiang.

In response, H&M says that its supply chain policy did not represent any political position, and that it cooperated with more than 350 manufacturers in China.

The ripple spreads to other brands including Nike, Adidas, Uniqlo, Hugo Boss and Burberry, but H&M bears the brunt of the criticism.

March 29 - The Chinese branch of BCI says it has found no evidence of forced labour in Xinjiang.

March 31 - H&M’s CEO says that about 20 stores were closed in China. H&M says in a statement that it is dedicated to regaining the confidence of its Chinese consumers.

July 1 - H&M reports a 28 percent year-on-year drop, or 23 percent measured in local currencies, in sales in China in the three months through May to 1.6 billion crowns ($189 million). The H&M brand remains off Tmall and Chinese mobile phone makers’ app stores, and H&M tells analysts and reporters the situation in China remains “complex.”

By Anna Ringstrom; Editing by Tony Munroe and Alex Richardson

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