Dive Brief:
-
This year, H&M Group plans to open around 100 new stores and to close around 160, according to its annual report. While that is a net reduction of 60, the remaining stores will make a positive contribution to sales. So far in 2024, a net 31 stores have closed.
-
In 2023, the company opened 101 new stores and closed 197 stores, ending the year with 4,369 worldwide, among all its brands. Going forward, there will be fewer closures while new openings will continue, per the report.
-
This year, H&M will also refurbish about 250 stores, including in New York, London, Berlin and Stockholm, according to another report on the company’s Q1 results.
Dive Insight:
Four years ago H&M Group pulled back on what had been a 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, 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 further elevate the shopping experience,” Helmersson said. “We are ensuring that we have the right store with the right format in the right place. Our stores, which are in prime locations, are a major asset where we meet our customers every day.”
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. Stores are built, furnished and operated with sustainability in mind, with 91% equipped with LED lighting, the company said.
Most new stores will be located in growth markets, while most closures will affect established markets, the company said. 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 the company launched a membership-based brand dubbed Singular Society, which has a flagship store in Stockholm, per the report. More than 170 H&M Group stores in Russia have permanently closed. Two years ago the company temporarily closed its stores in Ukraine, but has been able to gradually reopen most, per the report.
This week, H&M Group also reported that Q1 sales declined 2.2% to 53.7 billion Swedish kronor ($5 billion at press time). Gross profit rose 7%, reaching gross margin of 51.5%.
