H&M closes 128 stores worldwide
A popular fast-fashion retailer is accelerating a years-long restructuring effort, continuing to shrink its global footprint in 2026 after closing hundreds of locations over the past year.
The move reflects broader shifts across apparel retail as brands face rising operating costs, changing consumer behavior, and intensifying competition from e-commerce rivals.
Companies built around speed, price, and online scale have reshaped consumer expectations. Platforms such as Shein and Temu have expanded rapidly by combining ultra-low prices, broad assortments, and fast product turnover, increasing pressure on established apparel retailers.
With that context, one of the industry's most recognizable global chains is moving toward a leaner store network while increasing investments in omnichannel growth.
Founded in 1947, H&M Group (HNNMY) operates in more than 80 markets, with online sales in over 60 of them. Its portfolio includes brands such as H&M, COS, Weekday, Cheap Monday, Monki, & Other Stories, Arket, Singular Society, and Sellpy.
H&M closes 128 stores worldwide
H&M closed 128 stores as of May 31, 2026, compared to the same period last year, according to its second quarter 2026 earnings report.
This reduction lowered the company's store count by 3% across all brands and markets to 4,038 locations worldwide.
H&M said the changes are intended to strengthen long-term profitability and improve how customers interact with its brands. While some stores are being closed, others are being upgraded or opened in locations considered to have greater potential.
Net sales in local currencies decreased by 1% year over year but remained broadly in line with the prior year. H&M said it expects the impact of its portfolio changes to become slightly positive over the full 2026 fiscal year.
Despite softer sales, the retailer reported a 12% profit margin, supported by operational efficiency and cost control across markets.
"The purpose of the change is to make sure that we become more relevant for our customers by becoming close to our customers and move mandate and decision making closer to our customers so we take quicker decisions to become more relevant," said H&M CEO Daniel Ervér in the company's latest earnings call.
The combination of stable sales, higher profitability, and fewer locations suggests H&M is prioritizing efficiency gains over physical expansion.
H&M store closure strategy extends into 2026
The latest closures build on actions the retailer began last year.
H&M previously announced plans to close around 200 locations globally by the end of 2025, primarily in established markets, as part of a broader effort to optimize its physical footprint in response to evolving consumer demand, according to its second-quarter fiscal 2025 earnings report.
The company noted that it can renegotiate or exit about one-third of its leases each year, giving it flexibility to redirect capital toward stronger-performing stores, relocations, renovations, and digital investments.
The strategy is designed to increase productivity per location while reducing costs associated with excess inventory, staffing, and markdown activity.
That effort has continued into 2026.
H&M ended the first quarter of fiscal 2026 with 4,050 stores globally. By May 31, that figure had declined further to 4,038.
CFOTO/Future Publishing via Getty Images
H&M's next phase focuses on omnichannel growth
Looking ahead, H&M's expansion strategy centers on meeting customers across physical and digital channels.
"Customers want to be inspired and have products available so that they can shop where, when, and how they choose," the company wrote in its first quarter of fiscal 2026 earnings report.
Here's some of my previous coverage of H&M:
- 79-year-old fast-fashion leader closing more stores
- H&M brings back popular designer collab after 20 years
For 2026, H&M plans to open approximately 90 new stores and close around 170, with most openings concentrated in growth markets.
Physical and digital capabilities remain the company's largest investment priorities, although online now accounts for more than 30% of total sales.
H&M said it will continue to adjust its footprint on a per-market basis, depending on customer behavior and lease flexibility.
The retailer is also expanding into new markets. Seven stores in Brazil are scheduled to open in the second quarter of 2026, following the first store opening in Rio de Janeiro in April.
Paraguay, Malta, and Azerbaijan are also entering the network in 2026, and Argentina is expected to launch through a franchise model in 2027.
Industry trends support H&M's new strategy
H&M's transformation aligns with broader retail trends.
The global e-commerce market was valued at $25.93 trillion in 2023 and is projected to grow at a compound annual growth rate of 18.9%, reaching $83.26 trillion by 2030, according to Grand View Research.
Industry analysts increasingly point to customer experience and adaptability as the defining competitive advantages.
"Digital commerce doesn't look the same as it did when it began," said Forbes Business Strategy and Growth Expert John Hall. "Brands that are succeeding are putting customer experiences at the center of dynamic strategies, constantly adapting to the digital landscape."
At the same time, physical retail remains dominant.
Brick-and-mortar stores accounted for approximately $14.4 trillion of total retail sales of $18.9 trillion in 2025, according to Euromonitor research gathered by EY.
"It's clear that the physical store still plays an important role," said EY Retail Analysts Malin Andrée and Jon Copestake. "Not only do stores have plenty of runway left in delivering revenue, but they also have opportunities to drive new growth and alternative revenue streams and, by working in tandem with digital channels, they can maximize returns on investment."
H&M's restructuring reflects a broader shift across retail towards prioritizing productivity, profitability, and customer relevance over store count growth.
Related: Target brings back iconic partnership after 17-year shutdown
The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
This story was originally published June 29, 2026 at 4:03 PM.