Swedish fashion retail brand H&M’s sign
Swedish clothing brand H&M said that China remains an important market for the company and that it will “do everything” to try to win back the trust of Chinese consumers. This is H&M’s first official public response since the Communist Party’s national boycott storm over its refusal to source cotton from Xinjiang.
H&M was one of the first foreign companies to be hit by the recent wave of boycotts of foreign goods in China. A statement it released last March about the Communist Party’s “due diligence” on cotton in Xinjiang was rehashed by the Chinese Communist Party, sparking outrage among the Chinese public. The statement expressed concern over reports of forced labor and religious discrimination against ethnic minorities in Xinjiang, and said it would no longer purchase cotton from Xinjiang.
The Communist Party’s official media and social media launched a fierce attack on H&M, accusing the company of spreading rumors and smearing the Chinese Communist Party. Then, international brands such as Nike and Adidas were also unearthed to have issued statements boycotting Xinjiang cotton.
Clothing brands such as H&M and Nike have recently faced a widespread boycott in China for announcing their refusal to use Xinjiang cotton. Some Chinese netizens have criticized these brands for “making money” while “taking advantage of the situation”.
In a statement Wednesday (March 31), H&M said, “We are working with our colleagues in China to do what we can to address the current challenges and find a way forward.”
The statement said the company is “committed to regaining the trust and confidence of our customers, colleagues and business partners in China.
H&M’s statement said, “China is a very important market for us, and our long-term commitment to China remains strong.” The statement mentioned that the brand has been launched in China for more than 30 years.
About 6 percent of H&M’s revenue comes from China, and nearly 10 percent of the company’s stores are in the country, according to the data. Prior to the boycott, China had become H&M’s third-largest market.
The company has not yet released data on the financial impact of the boycott or what measures have been taken in response to the controversy. Some analysts believe that in the short term, H&M’s sales performance in China will be negatively affected.
H&M wants to be a responsible buyer in China and elsewhere, and is currently developing a forward-looking strategy and actively working on its next steps in material sourcing.
The statement did not specifically mention Xinjiang, nor did it contain any words of apology.
Observers noted that H&M’s latest statement above came on the same day that the company’s quarterly earnings statement was released. The quarterly results showed a net loss of 1.07 billion Swedish kronor (about 104 million euros, $123 million) for the period from December to February last year.
H&M said that about 1,500 of the company’s 5,000 stores were temporarily closed in late March due to coronavirus restrictions. However, H&M’s sales jumped 55 percent in March compared with the same month last year.
The official account of the Communist Party of China’s CCTV Sina Weibo said H&M’s 500-word statement was “evasive, full of empty words and lacking in sincerity. Taiwan‘s Central News Agency (CNA) reported that the majority of Chinese netizens on the social media platform Weibo gave it a poor rating and vowed to continue their boycott.
International human rights groups say at least one million Uighurs and other Muslim minorities are held in detention camps in the Xinjiang Uighur Autonomous Region. In the camps, they are allegedly subjected to torture, forced sterilization, rape, forced political indoctrination and forced labor, among other human rights violations.
The U.S. Congressional and Executive Commission on China (CECC) noted in a study last year that forced labor based on “re-Education camps” is widespread in the Xinjiang region, with cotton, garment fabrics, shoes and other commodities being the most affected areas.
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