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| Coronavirus: H&M to close 250 shops as Covid drives sales online | Coronavirus: H&M to close 250 shops as Covid drives sales online |
| (32 minutes later) | |
| The world's second biggest fashion retailer, Sweden's H&M, says it plans to cut 250 of its stores globally. | The world's second biggest fashion retailer, Sweden's H&M, says it plans to cut 250 of its stores globally. |
| The closures will come next year after the firm said the Covid-19 pandemic had moved more shoppers online. | The closures will come next year after the firm said the Covid-19 pandemic had moved more shoppers online. |
| Although it said sales had continued to recover in September, they were still 5% lower than the same month in 2019. | Although it said sales had continued to recover in September, they were still 5% lower than the same month in 2019. |
| The firm has 5,000 stores worldwide, but it is not yet clear how many closures will be in the UK. | The firm has 5,000 stores worldwide, but it is not yet clear how many closures will be in the UK. |
| H&M has the contractual right to renegotiate or end leases on about a quarter of its stores every year. The retailer said that it planned a "net decrease of around 250 stores" next year. | H&M has the contractual right to renegotiate or end leases on about a quarter of its stores every year. The retailer said that it planned a "net decrease of around 250 stores" next year. |
| While its pre-tax profits fell to 2.37bn Swedish krona (£210m) for the nine months to 31 August, this was better than analysts had expected. | While its pre-tax profits fell to 2.37bn Swedish krona (£210m) for the nine months to 31 August, this was better than analysts had expected. |
| However, it said 166 of its stores worldwide remained closed, and a large number still had local restrictions and limited opening hours. | However, it said 166 of its stores worldwide remained closed, and a large number still had local restrictions and limited opening hours. |
| High Street stores hit | High Street stores hit |
| Analyst Richard Lim of Retail Economics told the BBC: "What we have seen generally over the past few months of the pandemic has been a step change in the number of sales going online. | Analyst Richard Lim of Retail Economics told the BBC: "What we have seen generally over the past few months of the pandemic has been a step change in the number of sales going online. |
| "That has affected all parts of the industry, but particularly clothing and footwear." | "That has affected all parts of the industry, but particularly clothing and footwear." |
| He also said that in terms of consumers physically visiting stores to do shopping, there had been a move from High Streets and shopping centres towards retail parks. | |
| "People can go in their cars instead of using public transport, and they are also able to buy in bigger bulk at retail parks," Mr Lim said. | "People can go in their cars instead of using public transport, and they are also able to buy in bigger bulk at retail parks," Mr Lim said. |
| 'Worst is behind us' | |
| H&M said it would now accelerate its plans to increase digital investment to cope with growing online demand. | H&M said it would now accelerate its plans to increase digital investment to cope with growing online demand. |
| The Stockholm-based firm said it had taken "rapid and decisive action" to manage the impact of the coronavirus, including changes to purchasing, investments, rents, staffing and financing. | The Stockholm-based firm said it had taken "rapid and decisive action" to manage the impact of the coronavirus, including changes to purchasing, investments, rents, staffing and financing. |
| Chief executive Helena Helmersson added: "Although the challenges are far from over, we believe that the worst is behind us and we are well placed to come out of the crisis stronger." | Chief executive Helena Helmersson added: "Although the challenges are far from over, we believe that the worst is behind us and we are well placed to come out of the crisis stronger." |
| Sofie Willmott, from analytics firm GlobalData, pointed out that H&M's sales in September "fell just 5% demonstrating the relevance of its product offer as shoppers start to feel more confident returning to stores". | |
| But she said the firm "must enhance its online proposition given the importance of digital channels, to succeed in a very tough market". | |
| In addition, Ms Willmot said H&M should consider "more significant changes" with regards to shop closures, or it will "continue to be hindered by its excessive store estate". |