“The spread of COVID-19 has caused an exceptional situation, and the H&M group is forced to make several difficult decisions,” an H&M spokesperson told Reuters. “Dialogue with employees on temporarily shortened working hours affecting tens of thousands of employees globally has been initiated in several markets. It also concerns officials at central functions.”
Reducing hours without implementing furloughs or layoffs would mark a different approach than that taken by many other retailers. In the U.S., hundreds of thousands of retail furloughs were announced this week by department stores including Nordstrom, JCPenney and Kohl’s as well as by big shoe players including Steve Madden, DSW parent Designer Brands and Famous Footwear parent Caleres.
FN has reached out to H&M for a statement.
The retailer had previously announced that it could furlough workers due to revenue setbacks caused by the coronavirus crisis — but it has not yet provided an update. The group said it was looking into “several measures” to reduce costs in the areas of buying, investments, rents and staffing. It is expected to provide more information when it releases its latest quarterly earnings report on Friday, April 3.
In H&M’s biggest markets, including Germany, the United Kingdom and the United States, all stores have temporarily closed. Of the company’s fleet of 5,062 units, 3,441 are shut. While consumers remain able to shop online, H&M said it saw a “significant negative impact” on revenues in March, coupled with “subdued demand” in the markets that remain open.
Report: Luxury Revenues Will Drop 20% to 30% in 2020