H&M Group issued its Q2 sales figures on Monday and it's no surprise that they didn't look good. The group’s net sales fell by 50%, although this was a little less than some analysts had expected.
Sales dropped to SEK28.664 billion (€2.7bn/£2.4bn/$3bn) this time from the SEK57.474 billion it had seen in the quarter covering March to May last year. Online sales rose by 36% to partially compensate for the plunge.
Clearly, sales during Q2 were “severely affected by the Covid-19 situation”. In most markets, stores had to be temporarily closed and in the middle of April around 80% of the group’s giant store estate globally was temporarily shut.
But what has happened since? From the end of April onwards, it started gradually reopening stores in a number of markets in line with local restrictions. “The pace of the sales recovery varies at a large extent between markets,” it said, although it didn’t specify which markets were strongest or weakest.
At present around 900 stores, representing only around 18% of its 5,058-store total, are still temporarily closed and online sales are open in 48 of 51 online markets.
Sales this month, up to June 13, are still significantly down year-on-year with a 30% drop in local currencies compared with the same period in 2019. But taking account of the fact that 18% of its stores were still shut in early June and that a key market such as the UK will only reopen this week, the -30% figure does hint at signs of a recovery at the world's second-biggest fashion retailer.
That said, it's unlikely to get back to delivering sales rises any time soon as consumers process the giant shock to their systems that Covid-19 has been and keep tight control of their discretionary cash, in the short term at least.