H&M to shut a quarter of Spanish stores and lay off 588 employees

Swedish fashion retailer H&M announced on Friday a plan to close down more than a quarter of its stores and lay off as many as 588 workers in Spain, home of its bigger rival, Zara owner Inditex, local unions said.

 

The company will carry out the layoffs for unspecified organizational, productive and economic reasons, unions CCOO and UGT said in a joint statement.

 

The company has 91 stores and employs almost 4,000 people in Spain, according to H&M’s annual report. The retailer intends to close 28 stores.

 

The move is in keeping with other big fashion retailers around the world that have closed smaller stores in recent years while expanding flagship branches that draw more traffic and can double as e-commerce logistics centres.

 

H&M in Spain has also faced problems with absenteeism and workers complaining of work overload, according to union sources.

In November 2022, H&M announced a global plan to cut 1,500 jobs to trim costs. In Spain, it had already reduced its payroll by 400 people in 2021.

 

“We believe the measure is too aggressive and it is possible to look for solutions which don’t imply job losses,” the unions said.

Negotiations with the unions in Spain are due to start in September.

 

Angeles Rodriguez, a CCOO leader, said the unions were surprised by the announcement of layoffs.

 

“The company never showed any weird behaviour and was complying with a pay raise agreed last year,” she said. H&M granted significant pay increases last year after workers protested and went on strike.

 

H&M is the world’s second-largest listed clothing retailer behind Inditex and is a fixture in malls and high streets the world over.

H&M did not immediately respond to a request for comment.

 

First Published: Jan 26 2024 | 11:06 PM IST