The fast-fashion company has been shuttering hundreds of locations and growing its e-commerce, but said the pace of closures will slow this year.
Four years ago, H&M Group pulled back on its global expansion of its store network and began to emphasize e-commerce. In 2020, that meant closing some 170 stores, and in 2021, another 250; at the time, its footprint topped 5,000 locations.
In its year-end report, the fast-fashion company’s former CEO, Helena Helmersson, said that physical locations provide customers with an opportunity to “try on clothes and be inspired.” Helmersson stepped down unexpectedly in the new year after four years at the helm and was replaced by former H&M brand chief Daniel Ervér.
“The physical stores continue to be incredibly important, and in 2024, we are stepping up the pace of investment in the existing stores to elevate the shopping experience further,” Helmersson said. “We are ensuring we have the right store and format in the right place. Our stores, which are in prime locations, are a major asset where we meet our customers daily.”
The company’s stores also foster sustainability and serve as fulfillment hubs for delivery, pickup and returns. All use RFID technology, providing “precise information on availability and size options.” Some offer customers repair services. The company said that stores are built, furnished, and operated with sustainability in mind, and 91% of them are equipped with LED lighting.
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The company said most new stores will be located in growth markets, while most closures will affect established markets. The H&M brand plans to open its first store in Brazil in 2025.
By brand, H&M runs 3,872 stores in 77 markets, with an online presence in 60 markets; COS has 245 stores in 47 markets; & Other Stories has 72 stores in 25 markets; Weekday has stores in 14 countries; the Monki brand has 64 concept stores in 15 markets; and Arket has 30 stores in 14 markets.
In 2020, according to the report, the company launched a membership-based brand dubbed Singular Society, which has a flagship store in Stockholm. More than 170 H&M Group stores in Russia have permanently closed. The company temporarily closed its stores in Ukraine two years ago but has been able to reopen most of them, per the report, gradually.
This week, H&M Group reported that Q1 sales declined 2.2% to 53.7 billion Swedish kronor ($5 billion at press time). Gross profit rose 7%, reaching a gross margin of 51.5%.