STOCKHOLM, July 1 — Swedish clothing giant Hennes and Mauritz (H&M) reported today second quarter sales figures below analyst expectations as the company is being hit by a boycott in China.
The world’s second-largest clothing company posted a net profit of 2.77 billion Swedish kronor (RM1.3 billion) in its second quarter, compared with a loss of 5 billion for the same period a year earlier.
The result was driven by a 62 per cent jump in revenue to 46.5 billion kroner, although this still fell short of an analyst consensus compiled by Bloomberg of 47.4 billion.
“Despite continued restrictions, sales increased significantly compared with the previous year,” CEO Helene Helmersson said in a comment.
At the end of the company’s second quarter that runs from March through May, about 140 of the group’s 5,000 shops were temporarily shut due to Covid-19 restrictions, the company said.
While the clothing retailer is recovering, its net profit is still lower than the 4.57 billion kronor it booked in the second quarter of 2019.
But Helmersson also noted that the third quarter had “started well and we are almost back at the level we were at before the pandemic,” as the company reported that 95 stores remained closed.
H&M’s sales grew in all markets compared to the same period a year earlier, except in China where they fell by 28 per cent in China compared to the second quarter of last year and by 32 per cent compared to the preceding quarter.
While H&M didn’t confirm this to be the cause, the company has been the target of a boycott in the country.
China had become H&M’s third-largest country market before the boycott began, but was only sixth in the second quarter, according to the Swedish company’s earnings report.
The clothing giant, like several foreign brands, including Nike and Adidas, is caught in a difficult position in China, after it committed to stop sourcing cotton from Xinjiang province over allegations of the use of “forced labour”.
This in turn saw the Swedish clothing company among those targeted by a boycott campaign on Chinese social media.
H&M products have since been removed from some of the country’s main online sales sites.
Rights groups say more than one million Uyghurs and other mostly Muslim ethnic minorities have been held in internment camps in Xinjiang, where they have also been forced to work in factories.
Also today, French magistrates opened an inquiry into allegations that four fashion groups profited from forced labour of the Uyghur minority in China, by using cotton produced in the Xinjiang region.
The probe did not target H&M, but is looking at Zara-owner Inditex, Uniqlo, the French fashion group SMCP, and the footwear manufacturer Skechers. — AFP
Source: Malay Mail
No comments:
Post a Comment