Major international chains temporarily closing branches in China
The coronavirus epidemic that broke out in the city of Wuhan in China a few weeks ago is forcing many major international brands and retailers to temporarily close their branches. H&M took the lead, announcing the closure of 74 of its Chinese stores, and of four Monki stores, until further notice, according to press agency DPA. The Swedish fast-fashion retailer operates just over 500 stores in China, its fifth-largest market worldwide in terms of sales volume.
H&M also announced that it has stopped all business travel by its employees to China, and within the country. H&M employees returning from China have been advised to stay at home for two weeks before going back to their places of work.
Another ready-to-wear giant, Japanese group Fast Retailing, owner of Uniqlo, reported it has closed some 100 stores in the Hubei province, where the city of Wuhan is located, and in the surrounding area. Gap closed five stores, as well as three Old Navy stores, according to Business Insider. Spanish fashion-giant Inditex (owner among others of Zara, Bershka and Oysho), for whom China is the second-largest market worldwide in terms of doors with nearly 600 stores, has yet to announce any action.
Outside the fashion sector, many other major chains have taken preventive measures. For example, Starbucks, which has a very extensive footprint in China with over 4,200 branches, and has closed 2,000 of them, indicating also that this decision is bound to have an impact on its annual results. On January 29, Ikea decided to close half of its 30 Chinese branches, having done so with the Wuhan branch a week ago.
For all of these groups, which have followed the advice of the WHO and local authorities, the loss of revenue will undoubtedly be significant, all the more so since the virus’ spread hasn’t been stopped yet. The share prices of some leading luxury groups have also slipped on the world’s stock markets.
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