H&M sales in China hit with boycott

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People walk past an H&M store in a shopping district in Beijing, China, March 28, 2021. REUTERS / Thomas Peter

July 2 (Reuters) – Fashion retailer H&M (HMb.ST) has recorded a negative impact on sales in China in recent months, according to its latest results, after consumers there called for a boycott of foreign clothing brands in China. following on from their earlier comments on alleged human rights violations. in the western region of Xinjiang. Read more

Particularly highlighted was H&M, based in Stockholm, which counts China as one of its biggest selling markets – with 5% of sales last year – and one of its two biggest sources of purchase. on point. The company was wiped out of the Tmall e-commerce platform and its mobile phone card stores in China, while its app disappeared from local app stores. Read more

Some foreign researchers and lawmakers say authorities in Xinjiang are using coercive labor programs to meet the seasonal needs of cotton picking, which China firmly denies.

Here are the key milestones in the dispute that plagued the Swedish retail giant:

April 2007 – H&M opens its first store in mainland China, in Shanghai. At the end of February 2021, it had 502 stores in the country.

2016 – Reports begin to emerge alleging human rights violations in Xinjiang as authorities expand a network of internment centers as part of what they say are efforts to tackle religious extremism among Uyghurs and other predominantly Muslim minority groups.

August 10, 2018 – A United Nations human rights panel says it has received credible information that 1 million ethnic Uyghurs are being held in what looks like a “massive internment camp shrouded in secrecy.”

Aug 13, 2018 – China rejects the UN panel’s allegations but says some people have been re-educated after being deceived by extremists.

May 16, 2019 – A Wall Street Journal report names H&M among companies whose supply chains include yarn from Xinjiang. H&M says it would not form any new relationships in the region, according to the report.

August 2020 – The Better Cotton Initiative (BCI), an industry sustainability program, has announced that it is temporarily suspending licenses in Xinjiang due to forced labor issues. The declaration is no longer available online.

September 2020 – H&M issues statement expressing concerns over reports of forced labor, saying it does not work with any factories in Xinjiang, ensured its manufacturers do not employ workers from Xinjiang under programs transfer of labor, and no longer sources cotton from the region because it depends on farms approved by the BCI for its supply of Chinese cotton, which no longer include producers in Xinjiang.

March 24, 2021 – Chinese consumers and social media users, including the Central Communist Youth League, lash out at H&M, accusing it of smearing China and calling for a boycott, after its September 2020 statement resurfaced on social networks. On the same day, H & M’s searches on Chinese e-commerce platforms are blocked.

It was not clear why the old statement reappeared on social media, although it came days after a coordinated package of sanctions imposed on China by Britain, Canada, the European Union and the United States regarding human rights in Xinjiang.

In response, H&M states that its supply chain policy does not represent any political position and that it has cooperated with more than 350 manufacturers in China.

The ripple is spreading to other brands such as Nike, Adidas, Uniqlo, Hugo Boss and Burberry, but H&M bears the brunt of the criticism.

March 29 – The Chinese branch of the BCI says it has found no evidence of forced labor in Xinjiang.

March 31 – H&M CEO says around 20 stores have been closed in China. H&M said in a statement that it is determined to regain the trust of its Chinese consumers.

July 1 – H&M reports a 28% year-on-year, or 23% measured in local currencies, drop in sales in China in the three months to May to 1.6 billion kroner ($ 189 million). The H&M brand remains outside Tmall’s app stores and Chinese cellphone makers, and H&M told analysts and reporters the situation in China remains “complex.”

($ 1 = 8.5834 Swedish kronor)

Reporting by Victoria Waldersee in Lisbon and in the Beijing Newsroom, Additional reporting by Anna Ringstrom; Editing by Tony Munroe and Alex Richardson

Our Standards: Thomson Reuters Trust Principles.


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