STOCKHOLM (AP) — Low-cost fashion brand H&M said Friday that the closure of its business in Russia and Belarus had a significant negative impact on its results, while increases in the costs of raw materials and freight and the strength of the US dollar made purchases more expensive. .
The Sweden-based group said its net profit for the year ended November 30 fell 68%, while it reported a loss of 864 million Swedish kronor ($84 million) in the fourth quarter.
However, while 2022 was “a turbulent year,” in the words of CEO Helena Helmersson, the company noted that overall full-year sales were up 6%.
“Having left behind the worst of the negative effects of the pandemic, war broke out in Ukraine,” Helmersson said in a statement. “Our decision to liquidate the business in Russia, which was an important and profitable market, has had a significant negative impact on our results.”
After Russia’s offensive in Ukraine began on February 28, H&M Group first halted all sales in Russia, and on July 18, the company announced that it would close business in the country.
H&M said results were affected by one-time costs to end Russian operations and a cost-efficiency program. In November, the low-cost fashion brand said it was cutting its global workforce by around 1,500 positions as part of a plan to cut costs and further improve efficiency.
H&M was founded in Sweden in 1947. In addition to the clothing retailer, the group has brands such as COS, Monki, Weekday, Cheap Monday, & Other Stories, H&M Home, ARKET, and Afound. It has about 4,664 stores in 77 markets and has 57 online markets.