After what’s been a crazy past few months for the retail industry, another chain has decided to shut down a few of their stores in the new year.
H&M announced on Thursday, October 1 that they’re planning to close 250 stores in 2021 in order to focus more heavily on their online sales.
COVID-19 has completely shaken up the retail industry and has forced companies to rethink their business strategies in order to not only make money but to save money.
Read on to learn more about H&M’s plans, which also include opening new stores.
While they are planning to close 350 stores, the retail chain is also planning on opening roughly 100 new stores in areas where they believe they’ll succeed.
In fact, the company opened up a location in the Philippines in September and is planning to open up its first store in Panama in 2021.
This means, of course, they plan to have 250 fewer stores in 2021. Roughly one out of every 14 locations will be shut down.
The Swedish-based chain’s sales fell by more than a third in the United States this year’s third quarter, according to Business Insider.
South Africa, Singapore, and Hong Kong’s sales were even worse, but they account for less of H&M’s total sales.
Despite the low numbers, CEO Helena Helmersson remains optimistic about the future of the business.
“As a result of much-appreciated collections together with rapid and decisive actions, our recovery is going better than expected,” she said in a statement.
“We have strong, profitable online growth, and more and more stores have been able to open again. With more full-price sales than expected and strict cost control, we returned to profit already in the third quarter.”
Despite stores re-opening and foot traffic increasing, more and more retail chains are choosing to focus on e-commerce moving forward.
In fact, H&M plans to launch online sales in Australia by the end of 2020 and focus on sustainability moving forward.
“More and more customers started shopping online during the pandemic, and they are making it clear that they value a convenient and inspiring experience in which stores and online interact and strengthen each other,” Helmersson said.
“The substantial investments made in recent years have been very important for our recovery and we are now accelerating our transformation work further to meet customers’ expectations.”
She continued, “We are increasing digital investments, accelerating store consolidation and making the channels further integrated.”