H&M to Shut a Fifth of Spanish Stores, Lay off 588 Workers

An H&M sign is seen at the entrance to an H&M store in Palma on the island of Mallorca, Spain June 14, 2019. REUTERS/Anna Ringstrom/ File Photo
An H&M sign is seen at the entrance to an H&M store in Palma on the island of Mallorca, Spain June 14, 2019. REUTERS/Anna Ringstrom/ File Photo
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H&M to Shut a Fifth of Spanish Stores, Lay off 588 Workers

An H&M sign is seen at the entrance to an H&M store in Palma on the island of Mallorca, Spain June 14, 2019. REUTERS/Anna Ringstrom/ File Photo
An H&M sign is seen at the entrance to an H&M store in Palma on the island of Mallorca, Spain June 14, 2019. REUTERS/Anna Ringstrom/ File Photo

Swedish fashion retailer H&M announced on Friday a plan to close down more than a fifth of its stores and lay off as many as 588 workers in Spain, home of its bigger rival, Zara owner Inditex, local unions said.
The company will carry out the layoffs for unspecified organizational, productive and economic reasons, unions CCOO and UGT said in a joint statement.
The company said it has 133 stores in Spain and employs almost 4,000 people there, according to H&M's annual report. The retailer confirmed in a statement sent to Reuters it intends to close 28 stores.
H&M said that having stores at the right locations and staying competitive was a priority, and that it was "consistently" evaluating its store portfolio.
"This involves ... enhancing the shopping experience in our existing stores, actively seeking out new opportunities and making informed decisions about closing stores when necessary," it said, without providing further details on why it decided to close the stores.
The move is in keeping with other big fashion retailers around the world that have closed smaller stores in recent years while expanding flagship branches that draw more traffic and can double as e-commerce logistics centers.
H&M in Spain has also faced problems with absenteeism and workers complaining of work overload, according to union sources.
In November 2022, H&M announced a global plan to cut 1,500 jobs to trim costs. In Spain, it had already reduced its payroll by 400 people in 2021.
"We believe the measure is too aggressive and it is possible to look for solutions which don't imply job losses," the unions said.
Negotiations with the unions in Spain are due to start in September. H&M said it had already informed the union and that it would work closely with it.
Angeles Rodriguez, a CCOO leader, said the unions were surprised by the announcement of layoffs.
"The company never showed any weird behavior and was complying with a pay raise agreed last year," she said. H&M granted significant pay increases last year after workers protested and went on strike.
H&M is the world's second-largest listed clothing retailer behind Inditex and is a fixture in malls and high streets the world over.



Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
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Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)

Birkin-bag maker Hermes reported a 13% rise in second-quarter sales on Thursday, demonstrating the continued appetite from wealthy shoppers for its luxury handbags, even as less affluent consumers pull back.

Sales at the French luxury group grew to 3.7 billion euros ($4.02 billion), a 13% organic sales rise that strips out currency fluctuations. The figure was in line with analyst expectations, according to a Visible Alpha consensus.

Operating profit for the first half was 3.1 billion euros, compared to a forecast from consensus provider Visible Alpha for 3.2 billion.

One of the most steady performers in the luxury goods sector -- even as economic conditions worsen -- the French group's results stand out after a string of disappointing earnings updates from peers which have raised investor concern about uncertain prospects for the sector in the coming months.

Hermes' famously classic designs and tight management of production and stock have helped reinforce the label's aura of exclusivity, and CEO Axel Dumas told reporters the company had seen "no big interruption in trends".

However, he said Hermes was seeing slightly less traffic with aspirational clients, which was impacting higher volume products like fashion accessories.