H&M vows to rebuild trust in China after Xinjiang backlash
STOCKHOLM (Reuters): H&M vowed on Wednesday (March 31) to win back trust in China amid growing signs its fashion empire is suffering from a backlash after it voiced concerns last year about alleged human rights abuses in Xinjiang province.
The comments come as Western brands battle to strike a balance between consumers in the world's second-largest economy and public opinion at home, which has become increasingly concerned about reports of forced labour in Xinjiang.
China denies the reports.
H&M, which also reported a quarterly loss due to the continued closure of some of its shops in the pandemic, has come under fire from consumers and officials in China after one of its statements from 2020 resurfaced on social media.
In it https://hmgroup.com/sustainability/fair-and-equal/human-rights/h-m-group-statement-on-due-diligence, the world's second-biggest fashion retailer expressed concern about the allegations of forced labour in Xinjiang and said it would no longer source cotton from there.
China is H&M's top clothing supplier and fourth-biggest market by sales.
Other Western brands including Burberry, Nike and Adidas have also been hit by consumer boycotts in China for raising similar concerns.
In a statement https://hmgroup.com/news/statement_hm_china alongside its quarterly results, H&M said its commitment to China remained strong and it was dedicated to regaining the trust and confidence of customers, colleagues and business partners there.
"By working together with stakeholders and partners, we believe we can take steps in our joint efforts to develop the fashion industry, as well as serve our customers and act in a respectful way," it said.
The statement made no mention of Xinjiang, and did not give details on how H&M hoped to win back Chinese consumers' trust.
"Why doesn't H&M apologise openly to consumers?" a post from state-owned China Central Television on microblog service Weibo said on Wednesday, calling H&M's statement a "second-rate public relations article full of empty words lacking sincerity."
H&M Chief Executive Helena Helmersson, formerly head of sustainability, told analysts and reporters on a call that 20 of the Swedish group's stores were currently closed in China, but declined to say whether that was related to the backlash.
H&M's official store on Alibaba's e-commerce platform Tmall in China has not been accessible for days, and on Wednesday its app was not available on the app stores of Chinese mobile companies Huawei and Xiaomi.
The Human Rights section of H&M's website hmgroup.com on Wednesday no longer carried the link to its 2020 statement on Xinjiang, though the statement could still be accessed through the page's direct address.
Statements expressing concerns about Xinjiang previously seen on the websites of several western fashion retailers, including Zara owner Inditex, were no longer available on Wednesday.
H&M declined to comment. Inditex did not respond to requests for comment.
Helmersson declined to say whether the backlash in China had caused any supply chain disruptions.
H&M shares were down 2.4% at 1130 GMT.
"We have seen brands like Nike and H&M weather similar controversies in the past and maintain relatively strong sales, however short term we think H&M may see a negative impact on its sales in the large and growing Chinese market," RBC Capital Markets analyst Richard Chamberlain said in a note.
H&M reported a pretax loss for December-February, its fiscal first quarter, of 1.39 billion crowns ($159 million) against a profit of 2.50 billion a year earlier. Analysts polled by Refinitiv had on average forecast a 1.41 billion crown loss.
Sales for March 1-28 were up 55% in local currencies, against a period heavily disrupted by the pandemic a year ago.
H&M said it would not propose a dividend at its annual general meeting but saw good prospects of one in the second half of the year.
The comments come as Western brands battle to strike a balance between consumers in the world's second-largest economy and public opinion at home, which has become increasingly concerned about reports of forced labour in Xinjiang.
China denies the reports.
H&M, which also reported a quarterly loss due to the continued closure of some of its shops in the pandemic, has come under fire from consumers and officials in China after one of its statements from 2020 resurfaced on social media.
In it https://hmgroup.com/sustainability/fair-and-equal/human-rights/h-m-group-statement-on-due-diligence, the world's second-biggest fashion retailer expressed concern about the allegations of forced labour in Xinjiang and said it would no longer source cotton from there.
China is H&M's top clothing supplier and fourth-biggest market by sales.
Other Western brands including Burberry, Nike and Adidas have also been hit by consumer boycotts in China for raising similar concerns.
In a statement https://hmgroup.com/news/statement_hm_china alongside its quarterly results, H&M said its commitment to China remained strong and it was dedicated to regaining the trust and confidence of customers, colleagues and business partners there.
"By working together with stakeholders and partners, we believe we can take steps in our joint efforts to develop the fashion industry, as well as serve our customers and act in a respectful way," it said.
The statement made no mention of Xinjiang, and did not give details on how H&M hoped to win back Chinese consumers' trust.
"Why doesn't H&M apologise openly to consumers?" a post from state-owned China Central Television on microblog service Weibo said on Wednesday, calling H&M's statement a "second-rate public relations article full of empty words lacking sincerity."
H&M Chief Executive Helena Helmersson, formerly head of sustainability, told analysts and reporters on a call that 20 of the Swedish group's stores were currently closed in China, but declined to say whether that was related to the backlash.
H&M's official store on Alibaba's e-commerce platform Tmall in China has not been accessible for days, and on Wednesday its app was not available on the app stores of Chinese mobile companies Huawei and Xiaomi.
The Human Rights section of H&M's website hmgroup.com on Wednesday no longer carried the link to its 2020 statement on Xinjiang, though the statement could still be accessed through the page's direct address.
Statements expressing concerns about Xinjiang previously seen on the websites of several western fashion retailers, including Zara owner Inditex, were no longer available on Wednesday.
H&M declined to comment. Inditex did not respond to requests for comment.
Helmersson declined to say whether the backlash in China had caused any supply chain disruptions.
H&M shares were down 2.4% at 1130 GMT.
"We have seen brands like Nike and H&M weather similar controversies in the past and maintain relatively strong sales, however short term we think H&M may see a negative impact on its sales in the large and growing Chinese market," RBC Capital Markets analyst Richard Chamberlain said in a note.
H&M reported a pretax loss for December-February, its fiscal first quarter, of 1.39 billion crowns ($159 million) against a profit of 2.50 billion a year earlier. Analysts polled by Refinitiv had on average forecast a 1.41 billion crown loss.
Sales for March 1-28 were up 55% in local currencies, against a period heavily disrupted by the pandemic a year ago.
H&M said it would not propose a dividend at its annual general meeting but saw good prospects of one in the second half of the year.
tomorrow i go buy h&m, to get ready for may1 labour day holiday, sure not made of xinjiang force labour cotton.
ReplyDeleteDo that while mourning that train tradegy in Hualien!
DeleteOoop… h&m white cotton shirt, made from anywhere but China, is a must.
This is 清明 where those 50+ deads must be addressed by a Formosa trained katak.
all human mourn tragedy except communist.
DeleteAs defined under that fart filled well!
DeleteBusiness is business, but H&M just make you understand you are dealing with Red Zombies.
ReplyDeleteWakakakakakaka…
DeleteBusiness is business? U know how business is been transacted?
Typically moneyed mfering 二世祖！
Ignoring u r the one that comes seeking wealth.
Whose the zombie - high on spurious altruistic demoNcratic farts of fabricated sources!
CCP-based companies make Mega Billions from the USA and European economies.
DeleteYet CCP is daily propagating propaganda demonising the USA and Europe.
Biting the hand that enriches you.
For all the talk about China transition to domestic consumption, Several hundred million CCP citizens will be rendered jobless if serious disruptions occur to the export trade to USA and Europem
"CCP-based companies make Mega Billions from the USA and European economies"
DeleteWow!!!???
There r no direct govt to govt business deals amongst China USA and European economies.
Most tradings r done through dealings with individual companies between these nations.
Chinese companies make money through pricing, quality & criteria as agreed between partners. Those oversea partners also make millions in profit - sometime many times of the Chinese margin.
Case in point - Apple iPhone!
Or u don't know bcoz u r just a f*cked silver spoon-feed 二世祖 of zilch business acumen!
Indeed, biting the hand that enriched u!
China has planned long long time for the sustainability of internal consumption. It would be tough but with diligent central planning, large affluent domestic population, complete range of industrial/consumer products manufacturing facilities & huge land bank, the plan WOULD work.
But outside China, several hundred million of citizens of various nations will be rendered jobless due to serious disruptions occur to the export trade to China, the only growing economy! The shortfall of supply chain in facemask/ventilator/medical clean suits during the pandemic has proven how critical is the role of China in moving trades/lives!
Old moneyed mfer, keeps to yr misplaced fart of know-nothing. Do count yr reserve for a rainy days. It's near.
Served them RIGHT!
ReplyDeleteWant to make money while criticizing the land that provides the opportunity!
Moreover, criticized using fake & fabricated sources!
no apology, n still no use of force labor cotton.
Deletebravo h&m, no calling ccp big brother.
Good, moves all the h&m stores out from China, maybe to that doomed Formosa.
DeletePlaying with fluidity of double words in a public statement only please know-nothing mfers.
Don't wait her fate like lotto! By then, there wouldn't be an underpants left.
H&M will have to burn BCI at the stake and make a complete break with the US driven agenda to shore up their own cotton industry. At the very least, this company have to endorse their business in Xinjiang and employ the Uyghurs there.
ReplyDeleteH&M as the 'leader' has just 'appointed' itself to be slain for its thoughtless foolishness. Nike, Zara and Uniqlo etc are like mindless sheeple following the leader to run off the side of the cliff into the abyss, hehe.
H&M had taken part in a dangerous political game.