H&M’s Revenue in China Plummets After Labor Rights Controversy
H&M’s Revenue in China Plummets After Labor Rights Controversy
(Bloomberg) -- Hennes & Mauritz AB’s revenue in China fell at least 40% in its most recent quarter as the retailer bore the brunt of a social-media backlash following earlier comments expressing concern about forced labor in Xinjiang.
China fell off the list of H&M’s 10 largest markets in the three months through August, according to the company’s results released Thursday, indicating how big the decline has been.
The company confirmed Danske Bank analyst Daniel Schmidt’s calculation that revenue from the country must have dropped at least 40% on a conference call Thursday. Chief Executive Officer Helena Helmersson said it’s a “complex situation,” and declined to comment further.
Last year, China was H&M’s fourth-largest market and the source of more than $1 billion of revenue. Chinese social-media users started calling for a boycott of H&M in March after an earlier statement by the retailer expressing concerns about forced labor in Xinjiang. H&M responded at the time with a new statement saying that ethical purchasing is still a priority, without mentioning Xinjiang.
Spain was H&M’s 10th-largest market in the third quarter with sales of 1.55 billion kronor, or $177 million. That calculates into at least a 40% drop in Chinese revenue, based on the 2.55 billion kronor reported for that market in the third quarter of last year.
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