HomeShoppingH&M to close one-fifth of Spanish stores, cut 588 jobs- Republic World

H&M to close one-fifth of Spanish stores, cut 588 jobs- Republic World

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H&M, the Swedish fashion retailer, unveiled plans on Friday to shutter over 20 per cent of its stores and lay off up to 588 employees in Spain, where its major competitor, Zara owner Inditex, is based, according to local unions.

The decision to lay off workers, attributed to organisational, productive, and economic reasons, was announced jointly by unions CCOO and UGT. 

H&M, which currently operates 133 stores in Spain and employs nearly 4,000 people in the country, confirmed its intention to close 28 stores.

Stating a commitment to maintaining competitive store locations, H&M stressed the importance of enhancing the shopping experience and evaluating its store portfolio. 

While the company did not elaborate on the rationale behind the closures, the move reflects a broader trend among fashion retailers globally to consolidate smaller stores while expanding flagship branches.

In addition to streamlining operations, H&M’s decision may also address issues of absenteeism and work overload among its Spanish workforce, according to union sources. 

The announcement follows a global initiative by H&M in November 2022 to reduce 1,500 jobs worldwide, with Spain having already experienced a reduction of 400 positions in 2021.

Negotiations with Spanish unions are slated to commence in September, with H&M indicating its commitment to collaboration. 

Union representatives expressed surprise at the layoffs, citing H&M’s adherence to a pay raise agreement reached last year, which followed worker protests and strikes.

As the world’s second-largest listed clothing retailer after Inditex, H&M’s strategic restructuring reflects ongoing challenges faced by the fashion industry amidst evolving consumer preferences and market dynamics.

(With Reuters Inputs)

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