H&M closes Shanghai flagship store, hurt by closures and consumer backlash

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SHANGHAI: H&M has closed its Shanghai flagship store, its latest closure in China where consumer demand has crashed amid COVID-19 shutdowns and the fast fashion retailer has borne the brunt of a backlash against businesses who refuse to use Xinjiang cotton.

Although it opened earlier this month, the three-story building in downtown Shanghai was closed on Friday with its H&M signage gone.

The world’s second largest fast fashion retailer entered China in 2007 with the opening of the Shanghai flagship store and has grown rapidly. It had more than 500 stores in mainland China at the start of last year, but its website currently lists only 376, including the Shanghai flagship store.

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The company declined to comment, citing a blackout period before its first-half earnings report on June 29.

Although nearly a month has passed since Shanghai lifted a strict two-month lockdown, consumers have yet to return to malls in significant numbers.

Chinese consumers also retreated from their products after a letter in which H&M raised concerns about allegations of forced labor in the Xinjiang region came to light in 2021.

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Other brands that have publicly disavowed Xinjiang cotton such as Zara, Nike and Inditex’s Adidas have also suffered from Chinese netizens calling for boycotts and Chinese celebrities refusing to do business with them.

But the backlash against H&M, the first overseas retailer to voice concerns, has been particularly harsh. Unlike other brands, its products remain unavailable on major Chinese e-commerce sites such as Tmall and JD.com.

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UN experts and rights groups estimate that more than a million people, mostly Uyghurs and other Muslim minorities, have been detained in recent years in a sprawling camp system in the western region of the country. Xinjiang in China.

Many former detainees said they were subjected to ideological training and abuse in the camps. China denies all accusations of abuse.

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