Swedish ready-to-wear giant H&M, which is gradually recovering from the effects of the coronavirus, reported a smaller-than-expected drop in profits on Thursday, but plans to reduce the number of stores by 5% in 2021 in the face of the boom in online shopping linked to the pandemic.
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Next year, Hennes & Mauritz plans to close 350 of its 5,000 stores worldwide and open 100, he said in a statement.
The group is experiencing a sharp drop in turnover but a jump in online sales.
“
The rapid changes in customer behavior have been accelerated by the Covid-19.
H&M is therefore still stepping up the pace of its transformation work, with digital investments (and) the optimization of the store portfolio
, ”the group explained in its quarterly report.
Net profit stood at 1.8 billion crowns (174 million euros) for the period June-August against 3.86 billion in the third quarter of 2019, for a turnover down 18.7%, to 51 billion.
In a reverse trend, online sales, which currently represent around a quarter of sales, grew 28% in local currencies in the third quarter.
Profit before tax is 2.37 billion, where the group had expected two billion in its preliminary results published in mid-September.
"
Our recovery is going better than expected (...) with higher-priced sales than expected and tight cost control, we returned to profit in the third quarter
", welcomed Helena Helmersson, CEO of the group, cited in the financial report.
On the Stockholm Stock Exchange, at midday, the title took more than 7%, hovering around 166 crowns.
The fashion brands, and in particular those of "
fast fashion
" like H&M, have been hit hard by the health crisis.
In mid-April, at the height of this crisis, around 80% of the Scandinavian brand's stores were temporarily closed.
Currently, 166 stores (3%) are still closed.