H&M to close 530 stores by end of 2021

H&M to close 530 stores by end of 2021
MIAMI BEACH, FLORIDA - OCTOBER 02: A H&M store is seen on October 02, 2020 in Miami Beach, Florida. H&M announced plans to close approximately 250 stores next year as the coronavirus pandemic has more shoppers going online instead of the brick and mortar locations. (Photo by Joe Raedle/Getty Images)

Fashion retailer H&M will permanently close 180 stores by the end of the year and will close another 350 in 2021, the company announced this month.

The company also plans to open 130 new shops within this year and 100 new store locations next year, including its first shop in Panama. More than 50% of new stores planned for this year have already opened.

The openings and closures are dependent on commercial lease agreements negotiated each year as well as a push for a bigger online presence prompted, in part, by the coronavirus pandemic.

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“COVID-19 is speeding up the digital shift in the industry as more and more shopping takes place online,” the company wrote in a report. “To meet customers' expectations of a convenient, inspiring experience enabled by interacting channels, the company’s transformation work is being further accelerated.”

The retailer said it will focus on “increased digital investments, further integration of online and physical stores” and “store consolidation.”

Swedish-based H&M, which is the parent company of eight brands popular across the world, is the second-largest retailer, according to Fast Company. The largest is Spanish-based Inditex, which also owns eight brands and is parent company to Zara.

As of the beginning of October, H&M operated 5,000 stores across all brands internationally.

Despite the coronavirus pandemic, the company reported sales in September decreased by only 5% compared to the same time last year. H&M reported only 3% of the stores it plans to reopen are still closed due to coronavirus-related shutdowns and restrictions.

According to H&M CEO Helena Helmersson, the company is strong, profits are higher than expected and the retailer is "well-placed to come out of the crisis stronger.”

The company has not yet announced which store locations will close or how many shops will close for each of its brands.

A representative for the retailer told the BBC it’s, "too early for us to give any details on this. The numbers will differ from market to market.”