Name: How China, Russia and Shein Have Weighed on H&M’s Profits | What Went Wrong | WSJ
Uploaded: 2023-05-06T09:46:31.000Z
Duration: 4 min 23 s
Description: VoiceTubeの動画で発音を聞きながら英語表現を覚えよう！学べる英語：

- [Josephine] In 1947, the first H&M store opened in Sweden.

And by 2019, there were over 5,000 H&Ms around the world,

about 3000 more than its competitor Zara.

- [Interviewer] How long have you waiting

- [Josephine] It collaborated with fashion giants

like Versace, Balmain, and Karl Lagerfeld.

What we do today will define our tomorrow.

- [Josephine] But recently, H&M has struggled.

The company's net income dropped during the pandemic.

And 2022 was one of the store's least profitable years

That same year H&M laid off 1500 employees.

- This morning major American companies pulling business

out of Russia, Disney, Warner Brothers, ExxonMobil, Ford.

- [Josephine] Russia was H&Ms sixth largest market.

H&M decided to close all of its stores in Russia

- They, of course, faced this unprecedented situation,

like a lot of brands last year with Russia's invasion

of Ukraine, that forced them to close a lot of stores

they would've had a fairly decent last year.

- [Helena] So our decision to wind down the business there

has had a significant negative impact on our results.

- [Josephine] The war also helped fuel inflation,

increasing raw material, and logistical costs.

H&M has had longstanding problems in China,

Consumers in China boycotted the company in 2021

after H&M raised concerns about alleged forced labor

and discrimination against ethnic minorities

Chinese consumers and online retail apps like Tmall,

Map apps like Baidu also removed H&M from their platforms.

- They've never really recovered from that issue.

- [Josephine] H&M also faced a setback when Covid lockdowns

in China led to store closures in the country.

- One big factor they face is their brand position.

But in recent years, they've faced this new competition

from online fast fashion players, like SHEIN,

who are even cheaper, even quicker to get new designs

- [Josephine] SHEIN has come onto the market

And unlike H&M, SHEIN is an online only retailer.

- They don't have physical stores, that's their model.

Only about 30% of its sales come from online.

- So H&M faces this predicament that on the low side,

they're being out flanked by SHEIN and online players.

into direct competition with a brand like Zara,

They've already closed something like 12%

And analysts generally think that's the right way to go.

That you close the underperforming stores,

invest in the best stores because most consumers

but then also try and build up the digital side as well.

- [Josephine] But can H&M get customers excited

- Fashion is a tricky business, of course,

'cause it relies a lot on this sort of intangible idea

And H&M seems to have lost a little bit of that resonance

about H&M clothes at the price point they're at?

And at the moment they, maybe they're having some success,

but I think they'd like to see a lot more

to really get young consumers especially back on board.