Covid-19: H&M unveils digitalisation plans after fall in sales during pandemic

H&M is set to accelerate the development of its digital capabilities following a substantial loss in sales in the first half of 2020 as a result of store closures during Covid-19. In a trading update published today, CEO Helena Helmersson acknowledged it is “clear that the rapid changes in customer behaviour caused by the pandemic will further speed up the digitalisation of fashion retail.”

In the period 1 December 2019 – 31 May 2020, the fashion retailer revealed that net sales fell by 23% in SEK (Swedish Krona) and by 24% in local currencies. In Q2 of 2020, from 1 March – 31 May, a period in which its physical stores were closed in many markets, sales declined by 50% in both SEK and local currencies.

H&M was able to grow eCommerce revenues in Q2 by 36% in SEK and 32% in local currencies to partially offset the loss of sales from store closures. It continues to rely heavily on these channels, with lockdown measures currently preventing many of its stores across the world operating at full capacity.

In light of the Covid-19 crisis, the brand outlined its intention to expand its eCommerce business, and speed up store closures, which it said will result in a net decrease of around 40 stores by the end of 2020.

Helmersson commented: “During the pandemic it became clear how important it is that the digital and physical channels interact to meet customers’ needs. When the majority of the stores were temporarily closed in the second quarter, we focused on redirecting product flow to our digital channels, which remained open at all times in nearly all our online markets. Online sales increased by 36% in SEK during the quarter. The positive development of online sales has continued since we began reopening our stores.”

She added: “We are continuing to adapt the organisation and improve our ways of working, which will make us more flexible, fast and efficient. We are accelerating our digital development, optimising the store portfolio and further integrating the channels.”