H&M closes Shanghai flagship store following lockdowns and consumer backlash

Swedish fashion retailer had more than 500 stores in mainland China in early 2021, but currently lists only 376, including the flagship Shanghai store
Closure comes after Shanghai’s two-month citywide lockdown and consumer boycott in 2021 over Xinjiang controversy

E-commerce

Reuters

Published: 7:40pm, 24 Jun 2022

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H&M has shut its flagship Shanghai store, its latest closure in China where consumer demand has slumped amid Covid-19 lockdowns. The fast-fashion retailer has also borne the brunt of a backlash against companies that refuse to use Xinjiang cotton.

Although it was open earlier this month, its three-storey store in downtown Shanghai was on Friday boarded up, with its H&M signage gone. The Swedish group, known in full as H&M Hennes & Mauritz AB, declined to comment, citing a blackout period before its first-half earnings report on June 29.

The world’s second-biggest fast-fashion retailer entered China in 2007 with the opening of the flagship store and rapidly expanded. It had more than 500 stores in mainland China early last year, but its website currently only lists 376, including the flagship Shanghai store.

Although nearly a month has passed since Shanghai lifted a strict two-month lockdown, consumers have yet to return to malls in significant numbers.

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Global brands face backlash in China for rejecting Xinjiang cotton

Chinese consumers have also retreated from its products after a letter in which H&M expressed concerns about allegations of forced labour in the Xinjiang region came to light in 2021. Other brands that publicly disavowed Xinjiang cotton such as Inditex’s Zara, Nike and Adidas have also suffered, with Chinese netizens calling for boycotts and Chinese celebrities refusing to work with them.

But the backlash against H&M, the first foreign retailer to express concerns, has been particularly strong. Unlike other brands, its products remain unavailable on major Chinese e-commerce sites such as Tmall and JD.com.

Shoppers torn over whether to boycott favourite fashion labels

UN experts and rights groups estimate that over a million people, mainly Uygurs and other Muslim minorities, have been detained in recent years in a vast system of camps in China’s western Xinjiang region. Many former inmates have said they were subject to ideological training and abuse in the camps. China denies all accusations of abuse.