After May, H&M Shanghai Nanjing West Road flagship store will celebrate its tenth anniversary, but the store failed to wait for its tenth birthday.
H&M store LOGO Photo by Times Finance
According to Fashion Business News, Swedish fast fashion giant H&M was boycotted by Chinese consumers, and many stores were affected. Recently, the Nanjing West Road store in Shanghai has been closed due to the expiration of the lease, and investment promotion words were posted on the door.
The H&M Nanjing West Road store, which had high hopes, opened in May 2011. As a flagship store, the store has been the first store for limited edition and co-branded products in recent years. For example, when the collaboration between Italian brand MARNI and H&M was released in 2017, the phenomenon of consumers queuing up at the door of the store late at night aroused heated discussion among the public.
Times Finance found on Xiaohongshu that as early as April this year, a real estate agency had listed H&M on Nanjing West Road (No. 881, Nanjing West Road) ) shop is open to the public for leasing. The shop has 3 floors, with construction areas of about 1,370 square meters, 1,620 square meters and 1,580 square meters on the first to third floors respectively. The total area exceeds 4,500 square meters, and the rent for the entire property is 3 million per month.
Li Hong (pseudonym), a real estate agent, told Times Finance that the H&M store decided to close in March this year. “This 4,000-square-meter shop can be divided and rented out.” , the minimum rent is 200 square meters, and the rent is 12-50 yuan/square meter/day depending on the location.”
Li Hong said that currently most of the shops are There are brands under discussion, mostly in the clothing category, which will be opened one after another.
Guangzhou’s core business district has also closed stores, and H&M has been abandoned by shopping malls
Except for Shanghai Nanjing West The H&M Gaode Land store located in the core business district of Guangzhou CBD is currently locked.
H&M Guangzhou Gaode Land Store Photo by Times Finance
“After the H&M Xinjiang cotton incident, there was no business here.” A clerk at the Huawei store next to the H&M point at AutoNavi Land Spring Plaza told Times Finance that the H&M store had closed in April this year.
“It is said that the mall does not allow us to continue doing it.” Xiaomei, a beauty brand salesperson on the same floor, recalled that before the Xinjiang Cotton Incident, white-collar workers from nearby office buildings could still be seen there. I came here to go shopping during my lunch break, and there were a lot of people coming and going in the store. However, as the Xinjiang cotton incident unfolded, the store was obviously deserted.
Times Finance found that although the door was closed, the furnishings inside the H&M store remained as they were and had not been emptied. Xiaomei said that the brand may still be there Handover with the mall. Times Finance contacted the Utopia investment promotion staff of AutoNavi Real Estate Group, who said that the shop has begun to contact new brands.
Since the Xinjiang cotton incident broke out in March this year, H&M has been removed from the shelves by many shopping platforms such as Taobao and JD.com. Times Finance found that it is closely related to offline consumer behavior No information about H&M stores can be found on the highly relevant Baidu Maps and Dianping APP. In other words, if consumers currently want to find the location of H&M stores, they can only go through the official website.
Times Finance visited the H&M Jiedeng Metropolis store in Yuexiu District on May 31. The store only has discounts in a few areas, and there are no fast fashion brands. “Big Sale” poster, most discounts are only reflected on the red tag on the hang tag. Times Finance also noticed that there are five shopping guides in the H&M store occupying three floors, and there is only one consumer shopping in the men’s clothing area on the third floor.
H&M Guangzhou Jiedeng Metropolis Store Photo by Times Finance
“H&M’s rental pressure should be very high. International fast fashion brands such as H&M and Zara usually pay rent in the form of direct rent payment and business deduction points. The deduction point is generally 7% of the store’s turnover. %-8%. Because the area of these brand stores is relatively large, usually thousands of square meters, if sales decline, their rent and operating costs will increase significantly, especially in the core business districts of first-tier cities.” Industrial Development of a well-known real estate group Li Chao (pseudonym), senior manager of research and planning at the center, told Times Finance.
Li Chao also said that the status of fast fashion brands such as H&M in the shopping mall investment chain is gradually declining. He said: “Five years ago, everyone hoped that fast fashion brands would attract traffic to shopping malls, but now, the fast fashion clothing industry is declining, especially brands with huge social controversies like H&M. Once the contract expires or sales do not meet the target, It will be dealt with immediately.”
Li Chao emphasized to Times Finance that H&M’s withdrawal is not a bad thing for the mall. Only in this way can the mall sublease the store at a higher price. Better brand.
Subject to administrative penalties 5 times this year
Not only closing stores, H&M is also in China We have been caught in the “storm of public opinion” several times due to administrative penalties due to product quality issues.
Tianyancha shows that H&M affiliated company Haynes Morris (Shanghai) Commercial Co., Ltd. has received 5 administrative penalties from January 1, 2021 to the present. Reasons for punishment include “producing products that do not comply with national standards, industry standards, and local standards that protect human health and personal and property safety”, “failure to indicate product specifications, grades, and the names and contents of main ingredients as required” and “producing and selling products. “Adulted, adulterated, fake as genuine, substandard as good”, etc. His illegal income of approximately 178,000 yuan was confiscated and a total fine of more than 584,000 yuan was imposed.
Huang Kai, an independent analyst in the fashion industry, believes that it is common for fast brands to be subject to administrative penalties due to quality problems, but H&M is more likely to be punished than other brands involved in the Xinjiang cotton incident. The fatal thing is that it was the trigger of the incident and also shouldered the first wave of public opinion pressure alone.
In terms of products, Huang Kai believes that although H&M is a representative brand of fast fashion, except for a few designer joint series, most of the brand’s products None of them are “irreplaceable”. Therefore, at a time when national sentiment is on the rise, online channels have been “blocked”, offline traffic has dropped sharply, and celebrity bloggers are afraid to bring goods for it. H&M China has suffered a devastating blow.
It is worth noting that before the Xinjiang cotton incident, H&M Group’s business was already suffering huge losses. According to the financial report, from December 1, 2020 to February 28, 2021, H&M’s sales dropped 21% year-on-year to 40.06 billion Swedish kronor (approximately RMB 30.13 billion), with a pre-tax net loss of 1.390 billion Swedish kronor (approximately RMB 30.13 billion). RMB 1.045 billion).
Among them, the Chinese market ranked third with sales of 2.388 billion Swedish krona. It was the only region with positive growth among H&M’s top ten markets, with sales increasing by 21 % (in local currency). As of February 28 this year, the number of H&M Group stores in China was 502.
An anonymous textile and clothing industry analyst believes that for H&M, which has a pure direct operation model, offline customer flow has dropped significantly and expected revenue is low. Under such circumstances, closing stores in China is an inevitable choice. Huang Kai also believes that the number of H&M stores in China will be further reduced. Although it will not be a devastating blow to the group, it will definitely make it worse.