H&M Group plans to close 28 stores in Spain and lay off nearly 590 employees, the Swedish retailer confirmed on Friday.
The country’s two trade unions, the Obreras Committee and the Trabajadores Confederation, first revealed the news to Reuters, noting that the company was downsizing its operations for unspecified organizational, productivity and economic reasons. .
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More than a fifth of H&M’s 133 stores in Spain will be closed, and the company employed around 4,000 people in 2022, according to its latest annual report.
In a statement, H&M said its priority is to have stores in the right locations and remain competitive, and that it evaluates its store portfolio “consistently”. You can unlock new opportunities and make informed decisions about closing stores if necessary. ”
The move comes just a year after Kos & Monki’s owners announced they would cut about 1,500 positions overall in the company’s workforce to control administrative and overhead costs.
“The cost and efficiency program we have launched includes a review of our organization and we are very mindful of the fact that our colleagues will be affected by this,” CEO Helena Helmerson said at the time. Ta. “We support our colleagues in finding the best solutions for their next steps.”
The job losses are part of a large-scale layoff trend aimed at streamlining operations and restoring inflation-hit companies’ profitability to pre-COVID-19 levels. Boohoo, Fruit of the Loom, Levi Strauss and REI all announced layoffs within the past week. Amazon, eBay, Etsy, Fantatics, Macy’s, Nike, Renewcell, VF Corp., Wayfair, and many logistics providers are also reeling from the cuts.
In December, H&M characterized net sales for the September-November fourth quarter as “flat” compared to a year earlier, at SEK 62.6 million, or nearly $6 million. In total, the company’s net sales decreased by 4% on a local currency basis compared to the same period last year.
Net sales for the financial year from December 1, 2022 to November 30, 2023 rose 6% to SEK 236 billion ($22.6 billion). The full year report is expected to be published at the end of the month.
Unions say H&M in Spain has been facing problems with workers complaining of absenteeism and being overworked. However, they pointed out that the layoffs were “too drastic and it is possible to seek solutions that do not imply job losses.”
Earlier this month, the Spanish government announced that the mandatory monthly minimum wage would increase by 5% to 1,134 euros (about $1,232) retroactively from January 1. Spain pays wages in 14 installments each year, so this equates to one year. The annual minimum wage is 15,876 euros ($17,247).
But H&M “never exhibited strange behavior and complied with the salary increases agreed last year,” the union said, adding that the company would pay Spanish store staff an extra 1,000 euros ($1,086) for 14 months. He referred to the agreement and the agreement to pay additional wages. After being fired by disgruntled employees in June last year, the company will now be paid monthly bonuses linked to sales performance over the next two years. Workers have argued that H&M pays them less than major rivals such as Spain-based Inditex’s Zara.
According to the 2022 report, Spain accounts for 3.7% of H&M’s global workforce.