The Swedish clothing and accessories chain H&M, the second largest textile group in the world after Inditex, has announced its intention to start an Employment Regulation File (ERE) in Spain, which will affect a maximum of 1,100 employees, which represents around 17% of its total workforce of about 6,200 workers between stores and warehouses. In addition, it has indicated that it will carry out a “substantial” modification of the working conditions in the country, according to the company in a statement.
The firm explained that the retail industry is experiencing “a great change”, as a result of the digitization, the modification in consumer behavior and the “constant” growth of the ‘online’ channel. In this context, the company indicated that it is in a process of transformation and world reorganization, which entails the adaptation of its operations and structure to “a more efficient organization”, while seeking to integrate “even more” physical and ‘online’ stores and carry out the necessary changes in the portfolio of stores to promote the multi-channel consumer experience.
For this reason, the company plans to open 100 new stores and close 350 facilities around the world in 2021, while in Spain it will reorganize its store teams and close 30 points, of which 27 will be from H&M and three from COS. The forecast is that these closures will be carried out “in a phased manner” in 2021, although they could last until 2022.
H&M indicated that its objective is “to maintain as many jobs as possible,” so it will prioritize “whenever possible” the option of voluntary assignment upon termination of the contract, in order to minimize the impact of the ERE. Thus, the firm stressed that it will offer “certain” possibilities of relocation and transfer and will implement an ‘outplacement’ plan for workers who finally have to leave the company.
“We need to adapt to changes in customer behavior and their needs to be able to remain competitive. It is necessary to make all these changes as a crucial step to ensure the long-term sustainability of our business,” they explained from the company.
Finally, they explained that the purpose of these measures is to continue with investments in “strategic” stores for the company and the ‘online’ channel and in the opening of new stores where it identifies “great potential.”