H&M’s business model has brought the group substantial sales for years. For some time now, the purchase of fashion and co. has been shifting more and more to the internet. In response, the group is pursuing a tough austerity course, which is why a number of branches are now also being closed in Germany.
H&M’s sales principle worked for a long time: The group built many branches in city centers where customers could shop for fashion products quickly and without frills. For around four years, however, H&M has repeatedly had to accept large losses in sales. The reason: the purchasing behavior of customers is shifting more and more to the Internet. The corona pandemic is also likely to have done the rest for the development.
According to information from “Business Insiders”, H&M plans to close around 240 branches worldwide this year. The German market, where more than 400 branches are operated, is likely to be severely affected. In return, around 120 branches are to be opened in so-called “growth markets” such as Ecuador.
H&M continues austerity course: 3,000 jobs have been cut since 2018
The branch closures are part of a tough austerity course that has been in place for several years. As Business Insider writes, H&M has already cut around 600 jobs in 2021. Apparently, this also affected young mothers, long-term sick people and people with disabilities, which brought the Swedish group some media headwind. A total of 3,000 positions have been deleted from the information since 2018.
Another large fashion chain in Germany recently announced the closure of a number of branches. Like many of its competitors, Orsay is suffering from the restrictions during the pandemic and has had to go through a protective shield procedure as a result. Read more about the topic here.
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