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H&M cuts down on staff

  

H&M will cut some 1500 jobs. This has been made necessary because of weaker profits. Costs of inputs are rising and consumers are buying less. Added pressure is also due to the fashion retailer’s exit from Russia after it declared war on Ukraine.

Europe is the hub for big business, where brands like H&M used to earn their big bucks. However, the war between Ukraine and Russia recorded high inflation and energy prices. This weighed down on customers, and people started cutting back to prepare themselves to face a tougher fiscal future. Russia has a population of more than 140 million, and exiting from such a huge market has resulted in a profit crash for the Sweden-based company by 89 per cent.

In 2021, H&M in Russia had ushered in its highest profit since 2009. However, in the pretax period between June 2022 and August 2022, profits fell. From no sales in the Russian market to high inflation, H&M has borne losses from everywhere. A stronger dollar has also resulted in a significant increase in the purchase of raw goods.

Overall these factors had a substantial negative impact on profits for the quarter.The Swedish fashion retailer employs roughly 1,55,000 people.

 
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