H&M (HMb.ST), the world’s second-biggest fashion retailer, said local currency sales had tumbled 57% since the start of March compared with a year ago as the COVID-19 pandemic and lockdowns kept most of its stores closed.
Online sales grew 32%, it said in a statement on Thursday, covering the trading period from March 1-May 6.
H&M warned on April 3 it would make its first quarterly loss in many decades in March-May, its fiscal second quarter.
It has started to gradually reopen stores from late last month but 3,050 or 60% remain temporarily closed.
“In those markets that have begun to open up, trade in the stores has initially been muted,” it said on Thursday in a statement ahead of its annual general meeting later in the day.
H&M said its inventories of unsold goods had grown to just above 41 billion Swedish crowns ($4.2 billion) at the end of April, from 37.2 billion at the end of February and 40 billion a year earlier.
It had flagged last month that stocks would temporarily grow due to the sudden drop in demand linked to the pandemic.
“Costs for markdowns are expected to decrease in absolute figures in the second quarter compared with the second quarter of 2019, but since sales will be significantly lower the markdowns are expected to have a negative effect on the gross margin of 2–4 percentage points,” it said on Thursday.
H&M’s shares were up 1.9% at 1000 GMT, having been slightly higher earlier in the day. Germany, its single-biggest market, on Wednesday announced steps to ease its lockdown.
In Germany, sales were down 46% so far in the second quarter, while in second-biggest market the United States they were down 71%, the group said.