H&M has closed its flagship Shanghai store, Reuters reported Friday.
Last March, the fast-fashion retailer found itself at the center of a consumer boycott in China aimed at companies that had previously refused to use Xinjiang cotton. Unlike other high-profile targets, such as Nike and Adidas, H&M’s products remain unavailable on major e-commerce sites like Tmall and JD.com, Reuters said.
Earlier this year, with coronavirus cases rising and the Chinese government dedicated to its “zero-Covid” strategy, major population centers like Shanghai and Beijing imposed strict lockdowns that effectively shuttered retail stores for weeks to months at a time. When H&M reported its latest earnings on March 31, CEO Helena Helmersson said the company had 42 stores closed in China “due to the pandemic.”
“When it comes to China we are still in a complicated situation,” Helmersson said. “As you all know one year has passed and we are still not on the level of sales we would have wished for. Of course, we are working really, really hard on this and we still see China as an important market for us.”
According to Reuters, H&M had more than 500 stores in mainland China early last year. As of Friday, it said, the website only listed 376, including the flagship in Shanghai. Reuters said the three-story store—open as recently as earlier this month—had been boarded up and its H&M signage removed.
H&M declined to comment. It is scheduled to publish its next earnings report Wednesday.
The retailer is far from the only brand experiencing a China slump. Nike reported a year-over-year sales decline in Greater China for a third straight quarter Monday. Under Armour said in May that restricted store hours and store closures in China due to Covid-19 weighed on overall first-quarter revenue by about 1.5 percentage points. Around the same time, Adidas reported that its Greater China sales had dropped 35 percent in the first quarter. In April, Puma revealed that revenue coming from the Asia-Pacific dropped 17 percent in the first quarter, year over year. It attributed the decline to Covid-related restrictions and geopolitical tensions in Greater China. All four companies were targeted in the Chinese consumer boycott that began last year in March.
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Last week, H&M unveiled the second “installment” of Hôtel Hennes, a popup event inspired by an imaginary hotel from its Spring/Summer 2022 brand campaign.
Located in New York City’s Lower East Side, Hôtel Hennes NYC was open to the public from Thursday to Saturday and featured a café, private “photo suites” and a rooftop lounge. The three-day event included drag performances and bingo, a dance performance and DJ sets with Ty Sunderland, Linux and Aquaria. H&M has nine locations in New York City.