79-Year-Old Fast-Fashion Giant H&M Shutters 128 Stores in Ongoing Restructuring Push
A 79-year-old fast-fashion giant is accelerating a years-long restructuring plan, closing more stores in 2026 as it doubles down on efficiency and digital growth. The retailer, which has already trimmed hundreds of locations over the past year, now operates 4,038 stores worldwide — down 3% from the same period last year.
H&M Group (HNNMY), the parent company behind H&M, COS, Weekday, Cheap Monday, Monki, & Other Stories, Arket, Singular Society and Sellpy, said the latest closures are part of a deliberate strategy to improve profitability and customer relevance. In its second-quarter 2026 earnings report, the company noted that net sales in local currencies dipped 1% year over year but remained broadly flat, while the profit margin held steady at 12%, supported by operational efficiencies and cost controls.
The cuts follow a broader industry trend. Traditional apparel retailers are under pressure from ultra-fast e-commerce rivals such as Shein and Temu, which have reshaped consumer expectations with low prices, vast selection and rapid product turnover. At the same time, rising operating costs and shifting shopping habits are forcing legacy players to rethink their real estate.
“The purpose of the change is to make sure that we become more relevant for our customers by becoming close to our customers and move mandate and decision making closer to our customers so we take quicker decisions to become more relevant,” CEO Daniel Ervér told analysts on the earnings call.
H&M began the year with 4,050 stores at the end of the first quarter, and by May 31 that number had fallen to 4,038. The company previously announced plans to shutter about 200 locations globally by the end of 2025, mostly in mature markets. It now expects the full-year impact of its portfolio changes to turn slightly positive for fiscal 2026.
According to its first-quarter earnings report, H&M plans to open roughly 90 new stores and close around 170 in 2026, with most new openings focused on growth markets. The retailer is also expanding into new territories: seven stores in Brazil are slated to open in the second quarter, following an April debut in Rio de Janeiro. Paraguay, Malta and Azerbaijan will also enter the network this year, with Argentina expected to follow via a franchise model in 2027.
H&M’s strategy reflects a retail sector where physical stores still matter — brick-and-mortar accounted for about $14.4 trillion of total $18.9 trillion in global retail sales in 2025, per Euromonitor data cited by EY — but where omnichannel integration is key. Digital channels now account for more than 30% of H&M’s total sales, and the company says it will continue to invest in both physical and digital capabilities.
The broader e-commerce market was valued at $25.93 trillion in 2023 and is projected to reach $83.26 trillion by 2030, a compound annual growth rate of 18.9%, according to Grand View Research. Analysts increasingly point to customer experience and adaptability as the defining competitive advantages.
“Digital commerce doesn’t look the same as it did when it began,” said John Hall, a Forbes Business Strategy and Growth Expert. “Brands that are succeeding are putting customer experiences at the center of dynamic strategies, constantly adapting to the digital landscape.”
Yet physical retail is far from obsolete. “It's clear that the physical store still plays an important role,” said EY retail analysts Malin Andrée and Jon Copestake. “Not only do stores have plenty of runway left in delivering revenue, but they also have opportunities to drive new growth and alternative revenue streams and, by working in tandem with digital channels, they can maximize returns on investment.”
H&M’s latest moves build on a broader portfolio optimization that began last year. The company noted that it can renegotiate or exit about one-third of its leases annually, giving it flexibility to redirect capital toward stronger-performing stores, relocations, renovations and digital investments. The goal: higher productivity per location and fewer costs tied to excess inventory, staffing and markdowns.
“Customers want to be inspired and have products available so that they can shop where, when, and how they choose,” the company wrote in its first-quarter earnings report. That dual-channel focus is now the core of H&M’s expansion strategy.
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This story was originally published by TheStreet on Jun 29, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.