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H&M Losses 4th Quarter

STOCKHOLM (AP) — Low-cost fashion brand H&M said Friday that shutting down its business in Russia and Belarus had a significant negative impact on its results, while increases in the costs of raw materials and freight and a strong U.S. dollar made purchases more expensive.

The Sweden-based group said its net profit for the year ending Nov. 30 fell 68% while it reported a loss of 864 million Swedish kronor ($84 million) in the fourth quarter.

However, although 2022 was “a turbulent year,” in the words of Chief Executive Helena Helmersson, the company noted that overall full-year sales increased by 6%.

“Having left the worst of the negative effects of the pandemic behind us, war broke out in Ukraine,” Helmersson said in a statement. “Our decision to wind down the business in Russia, which was an important and profitable market, has had a significant negative impact on our results.”

After Russia’s offensive in Ukraine started on Feb. 28, H&M Group first paused all sales in Russia, and on July 18, the company announced that it was winding down the business in the country.

H&M said that the results were impacted by one-time costs for ending the Russian operations and of a cost and efficiency program. In November, the low-cost fashion brand said it was reducing its global workforce by around 1,500 positions as part of a plan to reduce costs and further improve efficiency.

H&M was founded in Sweden in 1947. Beside the clothing retailer, the group has brands like COS, Monki, Weekday, Cheap Monday, & Other Stories, H&M Home, ARKET and Afound. It counts about 4,664 stores in 77 markets and has 57 online markets.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: us news

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