H&M, like so many other fashion companies, posted significant losses during the early days of the coronavirus pandemic, but the ever-agile fast fashion behemoth is readying itself for a major comeback by year’s end. Like similarly-minded low-cost retailers, the fast fashion giant lost money but is planning a major revival before 2021.
With expected pre-tax profit of approximately 2 billion SEK (approximately $2.27 billion USD), H&M’s sales are still down when compared to a year prior (19 percent lower when converted to Sedish Kroner), but it’s a minimized decline compared to the expected results. Furthermore, the company began the quarter with 900 of its 5,000 stores closed; now only 200 store are temporarily closed.
“More full-price sales combined with strong cost control enabled the company to already turn to profit in the third quarter,” H&M said in a statement. “As a result of appreciated collections together with rapid and decisive actions, the H&M group’s recovery is better than expected.”
This snappy recovery is indicative of the fast fashion industry’s ability to swiftly adapt to the pandemic’s demands (accessible digital services) and provide comfortable, affordable clothing with broad appeal. Investors rallied around H&M in response to the predicted report — which will be published in full October 1 — similarly to the recent funding that bolstered the embattled Everlane’s coffers. By and large, shoppers still crave cheap clothing and trendy styles.