Swedish fashion giant H&M announced on Friday its intention to shut down over 20% of its stores and lay off 588 workers in Spain, the home turf of its major competitor, Inditex, the owner of

Zara, according to local unions. The layoffs, attributed to unspecified organizational, productive, and economic reasons, were confirmed in a joint statement by unions CCOO and UGT.

H&M, with 133 stores in Spain and nearly 4,000 employees, as reported in its annual report, disclosed its plan to close 28 stores. The company emphasized the importance of having stores in optimal locations to remain competitive and stated that it consistently evaluates its store portfolio. However, specific details regarding the decision to close these stores were not provided.

The move aligns with a global trend among major fashion retailers that have been closing smaller outlets while expanding flagship branches, capable of attracting more foot traffic and serving as e-commerce logistics centers.

In addition to strategic considerations, H&M in Spain has encountered challenges related to absenteeism and worker complaints about excessive workloads, according to union sources.

H&M had previously initiated a global plan in November 2022 to cut 1,500 jobs to control costs, and in Spain, it had already reduced its workforce by 400 people in 2021.

The unions expressed their concern, labeling the measure as overly aggressive and suggesting that alternative solutions without job losses could be explored. Negotiations with the unions are scheduled to commence in September, with H&M stating that it has already informed and will collaborate closely with the union.

Angeles Rodriguez, a leader from CCOO, expressed surprise at the layoff announcement, noting that the company had been compliant with a pay raise agreed upon the previous year. H&M had implemented significant pay increases in response to protests and strikes by workers.

As the world's second-largest listed clothing retailer, trailing only behind Inditex, H&M continues to be a prominent presence in malls and high streets globally. Photo by Zarateman, Wikimedia commons.