H&M swings to loss in Q1

April 01, 2021
H&M swings to loss in Q1

After scrutiny over the human rights abuse, the company pledged to amend its relationship with China

The world’s second-biggest fashion retailer reported a quarterly loss of $159 million in Q1 2021. Despite the loss, the figures came ahead of the consensus.

H&M’s results came when the retail is facing backlash after it expressed its concern about the alleged human rights abuses in the Xinjiang province. After the concerns were voiced, the company announced that it would no longer source cotton from the region. China is the company’s top clothing supplier and its fourth-largest market by sales.

Still, H&M is trying to improve its relationship with Chinese customers, colleagues, and business partners. “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,” read the company’s statement.

For the future, H&M announced that it would not propose dividends, but it expects good figures in the second half of 2021.

After the news hit the wires, H&M stock price fell 2.4%.

Sources: reuters.com, hmgroup.com

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