Following the backlash from Xinjiang Uygur Autonomous Region, H & M vows to rebuild confidence in China



Stockholm—H & M vowed to regain confidence in China on Wednesday after expressing concern last year about alleged human rights abuses in the Xinjiang Uygur Autonomous Region, as the fashion empire is showing increasing signs of suffering a backlash.

Reports of forced labor in the Xinjiang Uygur Autonomous Region have become increasingly concerned Comments as Western brands fight to balance between consumers and household public opinion in the world’s second-largest economy It will be sent.

China has denied the report.

H & M, which reported quarterly losses as some stores continued to close in the pandemic, was criticized by Chinese consumers and officials after one of the 2020 statements reappeared on social media.

To That, The world’s second-largest fashion retailer has expressed concern about allegations of forced labor in the Xinjiang Uygur Autonomous Region and said it would not procure cotton from it.

China is H & M’s top garment supplier and the fourth largest market for sales.

Other Western brands such as Burberry, Nike and Adidas have been hit by Chinese consumer boycotts for raising similar concerns.

so statement In addition to its quarterly results, H & M said its commitment to China remains strong and is dedicated to regaining the trust and trust of its customers, colleagues and business partners in China.

“We believe that working with our stakeholders and partners can take a step towards joint efforts to develop the fashion industry, serve our customers and act with respect,” he said.

The statement does not mention the Xinjiang Uygur Autonomous Region, nor does it detail how H & M wanted to regain the trust of Chinese consumers.

“Why doesn’t H & M openly apologize to consumers?” A post by Weibo, a microblogging service from China Central Television, said on Wednesday that H & M’s statement was “second-rate, full of empty words without integrity.” Called “Public Relations Article”.

Backlash

H & M CEO Helena Helmerson told analysts and reporters on the phone that 20 stores in the Swedish group are currently closed in China, which was related to the backlash. I didn’t say if it was.

H & M’s official store on Alibaba’s e-commerce platform Tmall in China was inaccessible for several days, and on Wednesday the app wasn’t available on the app stores of Chinese mobile operators Huawei and Xiaomi.

The Human Rights section of H & M’s website hmgroup.com on Wednesday did not contain a link to the 2020 statement regarding the Xinjiang Uygur Autonomous Region, but the statement was accessible directly from the page.

A statement previously seen on the websites of several Western fashion retailers, including Zara’s owner Inditex, expressing concern about the Xinjiang Uighur Autonomous Region was no longer available on Wednesday.

H & M declined to comment. Inditex did not respond to requests for comment.

Helmerson didn’t say whether the backlash in China caused supply chain disruptions.

H & M shares fell 2.4% at 1130 GMT.

“Brands like Nike and H & M have overcome similar controversies in the past and have maintained relatively strong sales, but in the short term they could have a negative impact on sales in the fast-growing Chinese market. I think it’s sexual, “said Richard Chamberlain, an analyst at RBC Capital Markets. I said in a memo.

H & M reported a pre-tax loss of 1.39 billion crowns ($ 159 million) against a profit of 2.5 billion crowns ($ 286 million) in the same period last year from December to February in the first quarter. .. Analysts polled by Refinitiv predicted an average loss of 1.41 billion crowns ($ 161 million).

March 1-28 sales increased 55% in local currency compared to a period of great turmoil a year ago due to a pandemic.

H & M said it would not propose a dividend at its annual shareholders meeting, but said it had a good outlook for dividends in the second half of the year.

Anna Ringstrom and Helena Soder Palm

By Ana Banuelos

Ana is a blogger who is always fascinated with the technology and the amount of knowledge she can gather from the internet. She is trying to nerdify everyone around her with that same knowledge, through her writings.