Fast fashion giant H&M said the second half of its first quarter sales were negatively impacted by the outbreak of the COVID-19 virus, particularly in China.
The Swedish fashion retailer said its first quarter net sales from the period of December 1, 2019 to February 29, 2020 rose by 8 per cent to SEK 54.9 million (A$9.24 million). In local currencies net sales increased by 5 per cent.
From December 1, 2019 to January 23, 2020, sales in China increased by 27 per cent in local currency.
However, demand then decreased significantly as a result of the rapid development of the virus and therefore H&M’s sales in China decreased by 24 per cent in the quarter as a whole.
At its peak, 334 of the group’s 518 stores in China were closed in February.
Excluding China, Hong Kong, Singapore, Macau, Japan and Taiwan the H&M group’s sales in the quarter increased by 7 per cent in local currencies.
“So far in March sales have been negatively affected mainly in Europe as a consequence of the continued spread of the virus,” the company announced. “The situation in every country is changing rapidly.”
As the pandemic continues to spread, governments all over the world are taking precautions to try and contain the virus. A growing number of countries are now on lockdown and only essential stores have been allowed to remain open.
H&M has temporarily closed all its stores in Italy for the past few days and during the weekend all stores were also closed temporarily in Poland, Spain, the Czech Republic, Bulgaria, Belgium, France and partly in Greece.
Stores in Austria, Luxembourg, Bosnia-Herzegovina, Slovenia and Kazakhstan have closed since Monday. The company has also temporarily closed its stores in Switzerland, Greece, Slovakia, Lithuania, Peru, Ukraine, the Philippines, Malaysia and Cyprus.
Starting today, the company has closed all its 460 stores in Germany, based on decisions by the German authorities. In addition, the group is also closing all its 590 stores for two weeks in the US, 96 stores in Canada, Portugal and Belgium.
H&M’s online store, however, remains open.
The company said sales in China have gradually started to recover as the situation in the country has improved. Five hundred stores out of its 518 have now re-opened across China.
The company said it will post more updates on April 3.