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Highlights
- Swedish fast-fashion chain H&M has decided to close 240 stores.
- The brand reported increase in profits owing to the 2,950 job cuts.
- High-street brands have had a rough time during the pandemic.
High-street brands have had a rough time during the pandemic, but the situation is gradually improving. Swedish global clothing brand H&M, which was significantly impacted by the pandemic in 2020, has reported an 85% increase in its profits in 2021 to SEK14.3 billion (£1.14 billion) in its full-year report. However, this increase in profits is owed to the 2,950 job cuts, while the fast-fashion chain is now aiming to close 240 stores.
In 2021, the company’s profit before tax in Q4 went up by 64% to SEK6 billion. However, as per the full-year report, there was a 3% decline in staff numbers, falling from 110,325 in 2020 to 107,375 in 2021, out of which 10,540 are working in Sweden. According to H&M, the job cuts were attributed to the termination of temporary contracts, ending of probationary employment, as well as natural attrition.
Amid the pandemic-related restrictions, H&M group had a net decrease of 217 stores in 2021, as it closed 321 and opened 104 new stores. In 2022, the company plans to close 240 stores as mentioned above, but it will also open 120 new stores, making the net decrease reach 120 stores. With launch plans in six new markets, H&M said that growth markets will be targeted for new openings while closures will take place principally in established markets.
Coming to UK high-street brands, most reported a drop in footfall due to rising Omicron cases. But things are gradually improving. Let’s take a look at 3 FTSE high street stocks that may also perform well in 2022.
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Boohoo Group PLC (LON: BOO)
UK-based prominent online fashion retailer, Boohoo Group PLC, mainly sells clothing for 16-30-year-olds. As per its December 2021 trading update, growth expectations have been lowered for the financial year ending 28 February 2022, but it said that the pandemic’s impact is temporary.
In the three months to 30 November 2021, there was a 28% increase in gross sales of Boohoo. The market cap of the FTSE AIM 100 Index-listed firm stands at £1,308.83 million and it has provided a return of -69.53% to its shareholders in the last one year as of 28 January 2022. Boohoo Group Plc’s shares closed trading at GBX 103.25 on 28 January 2022.
Marks and Spencer Group Plc (LON: MKS)
World leading retailer Marks and Spencer Group Plc focuses on clothing, home and food products. As per its half-year results released in November, the company recorded a pre-tax profit of £187.3 million while its net debt dropped by 22.6% to £3.15 billion. The company has rebounded globally despite lockdowns. The market cap of the FTSE250-listed firm stands at £4,271.85 million and it has provided a return of 54.13% to its shareholders in the last one year as of 28 January 2022. M&S Group Plc’s shares closed trading at GBX 218.10 on 28 January 2022.
RELATED READ: Omicron hit UK high street: Should you buy these 2 FTSE 100 stocks?
Burberry Group plc (LON: BRBY)
Leading UK-based luxury fashion house Burberry Group plc offers apparel and accessories globally. On 19 January, Burberry released its Q3 trading update, which showed a jump in its retail revenue from £688 million in 2020 to £723 million in 2021. The company will also complete its £150 million share buyback before the year-end. The market cap of the FTSE100-listed firm stands at £7,421.99 million and it has provided a return of 8.06% to its shareholders in the last one year as of 28 January 2022. Burberry Group Plc’s shares closed trading at GBX 1,857.00 on 28 January 2022.