H&M sales volumes for the first quarter of 2020 increased by 8%. However, the spread of coronavirus may prevent further growth.
In the first quarter of 2020, H&M Group's net sales increased immediately by 8 percent to $5.6 million. However, according to the company, one should not expect any particular growth in the second quarter due to the widespread of coronavirus, especially in China.
From December 1, 2019, to January 23, 2020, H&M sales in China increased by 27% in local currency compared to the same period last year. However, the demand for branded goods then fell significantly due to the rapid spread of the disease. As a result, the company had to close 334 out of 518 Chinese stores, and this led to a 24% drop in sales in the country.
In March, on the contrary, the situation in Europe began to harm sales. However, the situation in each country is changing rapidly, and it is still too early to draw any conclusions. The case will become clear only by April 3, when the company will present its next quarterly report.
Over the past few days, the H&M Group has announced that it has temporarily closed all stores in Italy, Poland, Spain, the Czech Republic, Bulgaria, Belgium, France, and parts of Greece. Stores will also soon be closed in Austria, Luxembourg, Bosnia, and Herzegovina, Slovenia, and Kazakhstan. At the same time, the company reports that sales in China have gradually started to recover.
The crisis has come at a difficult time for the fast-fashion giant. Years of effort to remedy a bad situation have just begun to bear fruit; for the first time since 2015, the company has become profitable again. The new problems in the face of the virus will be an additional hard test for the company.