Retail giant H&M looking to close 7 stores across Australia

Retail giant H&M is set to shutter seven stores including prime sites in Sydney and Brisbane as it seeks to slim down its footprint.

H&M is triming its store footprint. Picture: Shae Beplate.

Global Swedish department store H&M is looking to close up to seven of its stores in Australia to trim its store count here by around 15 per cent as the retailer looks to battle the tough economic conditions for fashion and shift customers to its newly launched online platform.

One H&M store in Chatswood, in Sydney’s north, has already been closed with fears that more are to follow.

The decision by H&M to slim down its footprint in Australia brings to an end a rapid and aggressive expansion of the Swedish retail chain here which kicked off with its maiden store in Melbourne in 2014 and which was greeted by 15,000 customers surging through the store on its first open day.

H&M is bulking up its online operations.

The Swedish retailer and world’s second biggest fashion chain, popular for its private label fashions, quickly expanded to have 49 stores in Australia but now up to seven could close including a key site in Bondi, Sydney.

Retail industry insiders have provided a list of the H&M stores staring down the barrel of being closed, which are; Bondi Junction (NSW), Kotara (Newcastle, NSW), Warringah Mall (NSW), Chermside (QLD), Townsville (QLD) and Rockhampton (QLD). The seventh store in Chatswood, NSW, was quietly closed in January.

A spokeswoman for H&M declined to comment on the store closures.

It is believed internally H&M is preparing the final leasing, legal and other documents to begin briefing its 1300 staff on the planned round of store closures.

Many of the H&M stores speculated to be on the cards to close are in shopping centres under the Westfield banner owned by Scentre Group and would represent large store footprints across multiple levels that would need a number of new retail tenants to fill.

Some of these stores have been trading for years with Townsville and Rockhampton both opened in 2017 and the 7th and 8th stores to open their doors for the Swedish retailer in Australia.

Opening of H&M Hobart store. Picture: NIKKI DAVIS-JONES

The global COVID-19 pandemic has dented the Swedish chain’s profitability and in October H&M announced it would close 250 stores around the world from its portfolio of 5000 stores.

Australia has been one of the best performing regions for H&M since it first opened in 2014 as it and a number of other foreign fashion retailers flocked to Australia in the wake of the global financial crisis such as Zara, Uniqlo and Muji.

However, lately H&M’s performance in Australia has stumbled as it poured tens of millions of dollars into an aggressive expansion. For 2019 H&M Australia lurched to a full-year loss of $1.19m from a profit of $2.6m in 2018 although revenue was stronger, up to $390.3m from $354.2m as new store openings helped sales.

H&M recently launched an online site and has stated that globally it would invest more in its digital assets to accelerate the push to online.