H&M Group has refused to be drawn into media speculation that it has closed its flagship Shanghai store following a slump in consumer demand amid Covid-19 lockdowns and a China consumer boycott after the brand refused to use Xinjiang cotton on forced labour concerns.
In November 2020, H&M Group along with several other major brand names including Nike Inc and Boohoo Group, told UK politicians they do not have any supply chain links to the Xinjiang region of China.
Companies operating in the UK were called to submit evidence during a meeting of the Business, Energy and Industrial Strategy (BEIS) Committee yesterday (5 November) following a probe launched by the body in September to look at the extent to which businesses in the UK are linked to the use of forced labour of Uyghurs Muslims in Xinjiang. It followed a recent report by the Australian Strategic Policy Institute (ASPI) that mapped nearly 380 of China’s controversial detention centres in Xinjiang province.
Earlier H&M Group announced it was cutting ties with a yarn mill in Xinjiang with which it had an “indirect relationship” after it was alleged to be engaged in forced labour.
Then in March 2021, Chinese shoppers, angered by position statements on Xinjiang, threatened to boycott the brands.
Emily Salter, apparel analyst at GlobalData told Just Style: “Numerous Western brands have been performing poorly in China, suffering from the impacts of repeated COVID-19 lockdowns and a lack of appeal among consumers. Initial backlash against H&M and other players came after Western brands made statements condemning the alleged use of forced labour in cotton production in the Xinjiang region of China, but many Chinese consumers are still purchasing from domestic brands instead, dampening sales of Western brands in the long term.”
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H&M Group, which is in its quiet period ahead of its half-year results, declined to comment when approached by Just Style.