Fashion retailer H&M is downsizing its Australian operations, aiming to close two stores in March after shutting one store in January, according to a report in the AFR.

The business’ Townsville and Rockhampton stores will be shuttered next month, following the closure of its Chatswood store recently.

The Australian reports the business is looking to close another five Australian stores this year, though H&M denied that claim.

The fast-fashion firm closed 58 stores globally last year, and plans to close another 350 throughout this year.

“While we acknowledge the impact this will have on our colleagues as well as local communities, we see these store consolidations as vital in ensuring the long-term growth and success of the company,” a H&M spokesperson said, according to the AFR.

“It is part of our daily business to always make sure that we have the best location, the best business deal and optimise our store portfolio.”

According to the business, it plans to offset the closures with 100 new stores opening this year in developing markets.

Inside Retail has reached out to H&M for confirmation and clarification on how many staff members are likely to be affected by these closures.

The business recently revealed it had enjoyed positive online sales growth during the pandemic, but that lockdowns and trading restrictions had led to an overall full-year profit slide of 88 per cent, from $2.08 billion to $239.19 million.

“Taking decisive measures quickly, combined with an attractive customer offering, led to a better recovery than expected up until the second wave of the pandemic struck,” said group CEO Helena Helmersson.

“We are continuing our initiatives for digital growth, integration of the channels and optimisation of the store portfolio.”

At the time of the business’ worst performing quarter, 80 per cent of its stores were shuttered due to trading restrictions.