H&M has announced plans to shut 250 stores globally after customers shifted to online shopping due to the coronavirus pandemic.
Sales at the Swedish fast fashion chain slumped 16 per cent to £4.4bn in the three months to August as hundreds of its stores remained closed.
H&M said trading had picked up throughout the quarter and continued to rise in September but sales remain 5 per cent lower than it was a year ago.
Leases on around a quarter of H&M’s 5,000 branches are up for renewal next year, giving an opportunity to negotiate lower rents or exit contracts.
H&M had begun reducing its number of stores before the pandemic to adapt to a longer-term change in shopping habits. Those plans have been accelerated since Covid-19 spread across the world.
The company did not say on Thursday how many jobs would be impacted by the plans.
Shares in H&M rose 6 per cent in Stockholm on Thursday after pre-tax profits fell less than expected.
H&M said it has taken “rapid and decisive action” to manage the impact of the virus, addressing this with changes to purchasing, investments, rents, staffing and financing.
The company said it is ramping up its transformation programme in response to increased demand for its websites.
Helena Helmersson, chief executive of H&M, said: “Although the challenges are far from over, we believe that the worst is behind us and we are well placed to come out of the crisis stronger.
“Demand for good-value, sustainable products is expected to grow in the wake of the pandemic and our customer offering is well positioned for that.
“We are now accelerating our transformation work so that we continue to add value for our customers.”
Scores of retailers including Debenhams, John Lewis and WH Smith have announced plans to close branches and cut jobs since lockdowns began. Many shoppers have stayed away from high streets after they reopened, with clothing retailers seeing a particularly marked decline in sales, according to official figures for the UK.