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The apparel giant announces store cuts relative to tentative third quarter figures now released. According to CEO Helena Helmersson, it is a natural measure as a result of how purchasing patterns change and where the development of the coronary pandemic has accelerated.
– We see that customers want to find us both online and in physical stores and in some markets this means more closures. This mostly happens in mature markets in Europe and the US, he says.
No concrete figures
In more detail than that, H&M does not want to report which regions will be primarily affected. During the last quarter, Sweden chose to open two new stores at the same time that five disappeared.
– We do not come out with concrete figures but we see that we want to optimize our network of physical stores and integrate it with our online purchases in the best way. That’s why we look at all the markets and all the cities.
The message is not entirely unexpected. Already in relation to the last quarter report, an estimated net reduction of 40 stores was announced in 2020.
The most unexpected thing is perhaps the clear recovery that the garment giant has had in recent months after being strongly affected by the corona pandemic in the spring. A couple of weeks ago, sales figures were reported and the company issued a reverse earnings warning. The forecast was then that the profit before tax would be around two billion crowns.
Going up in the stock market
The result was just over 2.3 billion SEK and during the morning the stock took a good hit on the Stockholm Stock Exchange, up almost eight percent and therefore clearly outperforming OMXS30 companies. .
– The recovery has gone better and faster than we thought. It’s the powerful measures coupled with welcome billing, cost control and flexibility, says Helena Helmersson.
TT: You said in your intermediate presentation that “the worst is over.” Not worried about a second wave of infections and more shutdowns around the world?
– I’m not worried but humble and I have respect for what may come, it is quite unpredictable. What does not concern me is that we have shown that we can act on the basis of the current situation. Being flexible will be key.
It is clear that H&M has been affected by the increase in infection rates and the measures taken by various authorities in recent weeks. For TT, it is claimed that they currently have about 170 stores closed, slightly more than last week after being able to continuously open more and more stores during the summer.
– It is as unpredictable for us as it is for everyone else, says Helena Helmersson.
Tobias Österberg / TT
Quarter 3, 2020 Quarter 3, 2019
Net sales 50,870 62,572
Operating profit 2,700 5,029
Profit before tax 2,365 5,011
Profit after tax 1,821 3,859
Earnings per share SEK 1:10 SEK 2.33
Figures in millions of crowns unless otherwise stated.
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