H&M's sales tumble stockpiles grow

H&M, the world’s second-biggest fashion retailer, said local currency sales had tumbled 57% since the start of March compared with a year ago as the Covid-19 pandemic and lockdowns kept most of its stores closed. Online sales grew 32%, it said, covering the trading period from March 1-May 6.

H&M warned on April 3 it would make its first quarterly loss in many decades in March-May, its fiscal second quarter. It has started to gradually reopen stores from late last month but 3,050 or 60% remain temporarily closed. “In those markets that have begun to open up, trade in the stores has initially been muted,” it said.

H&M said its inventories of unsold goods had grown to just above 41 billion Swedish krona (US$ 4.2 billion) at the end of April, from 37.2 billion Swedish krona at the end of February and 40 billion krona a year earlier. It had flagged last month that stocks would temporarily grow due to the sudden drop in demand linked to the pandemic.