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Coronavirus Forces H&M To Scrap Dividend, To Review All Costs


03/23/2020


Coronavirus Forces H&M To Scrap Dividend, To Review All Costs
The coronavirus pandemic spreading all across the world has forced Sweden's H&M, the world's second largest clothing retailer, to announce on Monday that it would be scrapping its proposed dividend. The company also added that all parts of the company’s operations were also being reviewed by it, which will include all costs incurred by it. .   
 
Currently about 68 per cent of the stores of this global brand have been shut because of the coronavirus pandemic outbreak globally which has hit the entire clothing retail industry and this business condition has forced this historic move by H&M to scrap its dividend.
 
"At the moment, a total of 3,441 of the group's 5,062 stores are closed, which together with subdued demand in the markets that are still open, has had significant negative impact on sales so far in March," the company said in a statement.
 
In the areas of its business activities of buying, investments, rents and staffing, among other areas, the company is taking several measures, H&M said.
 
"Dialogue about temporary layoffs has been initiated in a number of markets and will be followed by further temporary. Layoffs in other markets that are impacted by the corona situation," the company said in the statement.
 
"Globally, this is likely to affect tens of thousands of employees in all parts of the business, although it is not currently possible to specify the exact number,". The statement further added.
 
H&M is also considering the option of whether it may need any lay off of permanent staff because of the negative impact that the coronavirus situation has had no the business, the company said.
 
H&M shares were down 3% by 1236 GMT on Monday, strengthening somewhat following the news. Its shares are still down around 40% this year.
 
(Source:www.todayonline.com)