H&M’s UK profits slumped from £37.3 million to £10.72 million, a drop of more than 70%, in the year to 30 November 2018, new filings at Companies House reveal.
Operating profit in the UK also plunged by 68.4% to £12.21 million while revenues remained broadly flat at £1.05 billion. The Swedish fashion giant said that in-store sales had increased by 0.2%.
By 30 November last year the retailer said it was operating 304 stores in the UK having opened 23 during the year and closed 12. For the current financial year it revealed that it only planned to open three stores.
The accounts were filed as it emerged over the weekend the retailer was playing hardball with UK landlords demanding turnover-based rents on some of its stores. It was also insisting that online returns to a certain store would be deducted from its turnover, which property sources claimed was a step too far.
The Times revealed that the retailer was seeking “occupational deals” but one property source told the newspaper that H&M was being too aggressive: “Some landlords are in a Mexican stand-off, but H&M’s UK team are just conveniently blaming their Swedish parent.”
Many retailers are in negotiations, or have completed negotiations, with landlords to reduce their rents include Ann Summers, Arcadia and Sports Direct for its newly acquired Jack Wills chain to name a few. Some are using the mechanism of a CVA to push through the cuts, while others are seeking new terms as leases come up for renewal.