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H&M set to permanently close eight shops in Italy - Metro US

H&M set to permanently close eight shops in Italy

FILE PHOTO: H&M logo is seen on a shop in Riga

MILAN (Reuters) – Sweden’s H&M <HMb.ST> is set to permanently close eight of its Italian stores, including two in the country’s fashion capital Milan, as it pushes ahead with plans that pre-date the COVID-19 pandemic.

The outbreak has forced the world’s second-biggest fashion retailer to temporarily close stores in more than a dozen markets, including all its shops in Italy.

After seven weeks of stringent lockdown measures – during which all businesses not deemed essential were forced to close- clothing retailers in Italy will be allowed to open again on May 18.

But H&M has told unions that two of its biggest shops in Milan and one in the southern city of Bari will never reopen their doors.

Between August and November it also intends to permanently close shops in the northern cities of Udine, Vicenza, Bassano del Grappa, Gorizia and in the Tuscan town of Grosseto.

“The decision to close is linked to the economic sustainability of each specific store,” a spokeswoman for H&M in Italy said in an emailed statement.

The statement said that the group intended to “optimise its store portfolio, add new services online and keep offering clients the best shopping experience, through different channels”.

H&M has been spending heavily to revive its business after years of falling profits and growing inventories due to slowing sales at its core H&M branded stores.

It is in the process of closing some H&M-brand stores across Europe and opening new ones mainly in emerging markets.

The eight Italian shops set to shut employ some 200 workers in total who cannot be laid off under current emergency measures in the country, which is battling Europe’s deadliest coronavirus outbreak.

Gennaro Strazzullo, a member of the UIL national union said the company had not indicated the coronavirus emergency was a reason for its decision.

“The company said the closures are necessary to guarantee the long-term sustainability of the firm, but the group is not struggling and their balance sheets are good,” he told Reuters, after a meeting between unions and the company on the matter.

A further meeting is scheduled for May 2.

Strazzullo said unions were aiming to get some of the workers moved to other jobs with the Swedish group in Italy.

H&M this month said it expected a loss in the second quarter after reporting a 46% plunge in March sales.

The group makes the bulk of its sales in Europe, with Germany its single biggest market, followed by the United States.

At the end of its 2019 fiscal year, at end-November, H&M had 181 stores in Italy and a turnover of 8.40 billion Swedish crowns ($849.62 million) in the country.

(Reporting by Claudia Cristoferi in Milan, Additional reporting by Anna Ringstrom in Stockholm, writing and additional reporting by Giulia Segreti in Rome; Editing by Kirsten Donovan)

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