H&M plans to resume operations in Ukraine

24 August 2023

In 2021, the H&M chain earned more than UAH 400 million in net profit in Ukraine, but after the start of a full-scale invasion, all of the group's stores were closed.

H&M entered Ukrainian market only in August 2018, opening its first store in Kyiv shopping mall Lavina Mall.

As of October 2021, seven stores of the network were already operating in Ukraine - five in Kyiv, one in Odesa and Kharkiv.

According to Opendatabot data, the total turnover of H&M in Ukraine in 2021 increased by 71% compared to the previous year and amounted to almost 1.2 billion UAH, the net profit amounted to 414 million UAH (204 million UAH in 2020). The average inventory period in years before the full-scale invasion was 2-3 months. As of December 31, 2021, the amount of cash in the balance sheet of H&M LLC amounted to more than UAH 700 million.

The dynamics of sales and net profit of the H&M network in Ukraine, starting from 2018, is shown in the following chart:

H&M Ukraine revenue, net profit 2022

In February 2022, immediately after the beginning of the full-scale invasion of the Russian Federation, all H&M stores in Ukraine were closed, so the chain's turnover in 2022 was only UAH 151 million. At the same time, the company continued to pay lease payments, as well as wages to its employees (as well as main H&M's competitor - Indetex Group).

During 2022, to meet current obligations, the company used cash accumulated as of the end of 2021 (the amount of cash during the year decreased from UAH 749 million to UAH 338 million, plus at the end of 2022, the company owned financial assets in the amount of UAH 280 million hryvnias).

According to H&M's announcement on its official website, starting in November 2023, the chain plans to gradually resume work in Ukraine.

As a reminder in 2022, the H&M chain completely left Russia (146 stores of the chain operated in the aggressor country by 2022). The group's loss as a result of the exit (according to the financial statements for 2022) amounted to about $180 million.

The total consolidated revenue of the H&M group in 2022 increased by 12% compared to the previous year and amounted to 224 billion Swedish krona (about $21 billion), the net profit was 3.6 billion krona ($340 million), significantly reduced compared to 2021 (11 billion krona).

The total number of chain stores worldwide at the end of 2022 was 4,465.