H&M swings to loss in Q1, pledges to rebuild trust in China after backlash

[STOCKHOLM] H&M reported a quarterly loss on Wednesday and said that it was dedicated to regaining shoppers' and partners' trust in China following a recent backlash in the country after comments it made last year the on the Xinjiang region.

The world's second-biggest fashion retailer is under fire from consumers and officials in China after an H&M statement from 2020 began circulating in social media expressing concern over reports of forced labour in Xinjiang, saying it would no longer source cotton from the region.

It said on its website that its commitment to China remained strong and it was dedicated to regaining the trust and confidence of customers, colleagues, and business partners in China.

"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.

H&M reported a pre-tax loss for the December-February period, its fiscal first quarter, of 1.39 billion crowns (S$83.9 million) against a year-earlier profit of 2.50 billion. Analysts polled by Refinitiv had on average forecast a 1.41 billion crown loss.

Sales in March 1-28 were up 55 per cent measured in local currencies.

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.

REUTERS