H&M ⁤Group Navigates Store Closures Amid ‍Turnaround Plan

⁤ Updated june 21, 2025
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H&M Group⁢ is moving ‍forward with its plan to streamline operations, which includes reducing its number of physical stores. The company reported a net reduction of ⁢40 stores during ⁣the last quarter, with closures continuing in recent months as part of⁣ a broader⁢ effort to improve efficiency.

Daniel Erver, who ⁤took over as chief executive last year, is spearheading the turnaround strategy. The goal is to reinvigorate growth for the⁤ group, which also owns brands like & Other Stories and Cos.

However, Deutsche‍ Bank’s Adam Cochrane suggests it’s ⁢too early to declare a turning point. He noted⁣ that unfavorable weather conditions in Europe and negative currency exchange rates have presented challenges during the second quarter.

Cochrane ⁢estimates H&M’s⁤ earnings will show a 21% year-over-year decline ⁢to 5.6 billion Swedish krona. While this is an enhancement⁢ from the 42% drop in the frist quarter,⁣ he said it’s still arduous to confirm‍ a sustainable⁣ turnaround.

He also pointed⁢ out that a buildup of unsold inventory from the first quarter may not ‍have been fully resolved, potentially ⁣creating further complications in the latter half of the year. Deutsche Bank forecasts sales growth of just 1.5%⁢ for the most recent quarter, which translates to roughly a 5% decrease when accounting for currency exchange rates.

Jefferies equity analyst James Grzinic offered a more cautious outlook,projecting growth of only 0.5% for the quarter. Grzinic said his brokerage has adopted a more ‍conservative stance on ⁤H&M’s recent ⁣performance, especially given indications that‍ rival Chinese e-commerce platforms are losing traction in the U.S.

Meanwhile, ⁤Inditex, the parent company of Zara and pull & Bear, has also ⁤experienced a slowdown in growth, reporting a 6% increase in recent‍ weeks.

What’s next

H&M Group will continue to focus on its turnaround initiatives, closely monitoring⁢ sales trends and inventory levels in the coming months to gauge the effectiveness of its strategic adjustments in a dynamic retail landscape.