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H&M makes a profit after drastically cutting costs during the pandemic. Sales are significantly weaker than in the same period last year, but increased after halving in the spring. By 3 p.m., the company’s share had risen nearly 10 percent on the stock market.
– This is partly because the recovery is faster and better than expected, but also because we have taken strong action. We also have well-received collections that have generated more full-price sales. This, combined with strong cost control, is behind the result, Helena Helmersson says of the report.
New rental conditions, lower staffing, reduction of purchases of goods, reduction of working hours and in some countries layoffs are behind the reduction in costs.
But something troublesome for H&M after the pandemic they are the alarms of the producing countries, about which DN has written. When sales plummeted in the spring, textile workers in countries where clothes are made by their jobs. In Bangladesh, India and Pakistan, union members have been laid off to a greater extent in factories where H&M clothing is produced.
Helena Helmersson, who took over as CEO of the company at the end of January this year, worked in the production phase of the company for many years and has also lived in Bangladesh. She gives you a picture of what happened:
– When consumption has decreased, producing countries have been affected. On this issue, our position is clear. It is unacceptable for suppliers to lay off employees due to union involvement.
What are you doing to prevent it from happening this way?
– We work together with others in industry, the union and the ILO to see how we can handle the problem. We always want the parties to come to the negotiating table to have a good dialogue between workers and employers. So our relationship with the union in the different markets is very important.
H&M does not own the factories where the clothes are produced and the current situation has led to a sharp drop in sales. Has it been adjusted too much for the company to remain profitable?
– When demand drops so drastically, it is in a way that probably no one has experienced before. We had to close 80 percent of our stores and we couldn’t keep producing when there was no demand. I have worked in production myself for so many years, so the social conditions in these countries are a matter of heart for me.
– What we have done is collaborate with other companies in the same situation. We have also had a dialogue with the union and the ILO (United Nations International Labor Organization, editor’s note) to see what we can do. In some of these countries, there is not the same safety net that we are used to here. To a large extent, we have been able to handle the good with our partners, among other things, by planning order placement in the future. But it is clear that it has been a difficult situation and I believe that we must work together to solve a problem like this, says Helena Helmersson.
In a supplemental email asks DN if H&M has ended collaboration with factories where union members have ended.
“There are examples of suppliers with whom we are in dialogue and in which in some cases we review our business relationship,” writes H&M communications manager Kristina Stenvinkel.
“Before making a decision on the dismissal, we have an obligation to review all other possibilities to find a solution because otherwise it affects the workers,” he continues.
