H&M slashes 1,500 jobs as shoppers pull back on fashion spending
The world’s second largest fashion retailer has announced a wave of lay-offs as the apparel sector grapples with weakening demand from shoppers.
The Swedish apparel giant said around 1,500 job cuts come as part of a plan set out earlier this autumn to save around 2bn Swedish crowns (£160m) each year.
“We are in a big transition and the whole retail industry is facing a lot of challenges,” H&M’s head of investor relations Nils Vinge told Reuters.
“It’s very clear that when consumers have paid for their food … energy, gas, and so on there is less to spend. So what is obvious is that demand for value for money increases”.
The Stockholm-based retailer said it was tackling costs from the Covid-19 pandemic, the conflict in Ukraine, as well as elevated freight and energy bills.
A large proportion of the job cuts will take place in Sweden, Vinge told the news agency.
H&M’s share price dipped by just below one per cent in afternoon trading on Wednesday, while its market value has slipped some 34 per cent over the past year to date.
The retailer has shuttered some 56 stores in the UK since 2020, when the Covid-19 pandemic broke out.
Job culls at the Zara rival were “symptomatic of the problems facing the fashion retail sector,” Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said.
Eye-watering energy prices meant that “keeping the lights and heating on in vast stores is becoming increasingly unaffordable,” she added.
“Shoppers are showing signs of trading down and hunting out bargains, so the pressure is on H&M to compete with chains seen as offering greater value, from Primark in high streets to Boohoo and Shein online.”