H&M has pulled the shutters down on its flagship store in Shanghai, China, where demand has fallen in the face of closures due to Covid-19 flare-ups and consumer discontent over the company’s stance on Xinjiang cotton.
Although it was open earlier this month, the three-story store in downtown Shanghai was boarded up on Friday, at the same time H&M signage was removed.
The world’s second-largest fast fashion retailer entered China in 2007 with the opening of this Shanghai flagship store and expanded rapidly from there. By early 2021, it had more than 500 stores in mainland China, but its website currently lists only 376, including the flagship Shanghai store.
The company offered no comment on the matter, citing a period of secrecy ahead of its first-half earnings report, due on June 29. Although nearly a month has passed since Shanghai lifted a strict two-month lockdown, consumers have yet to return to the malls as normal.
Chinese consumers have also stopped buying the chain’s goods after a letter surfaced in 2021 in which H&M expressed concern over allegations of forced labor in the Xinjiang region.
Other brands that have publicly rejected Xinjiang cotton, such as Inditex’s Zara, Nike and Adidas, have also faced backlash from local consumers, who are calling for boycotts, as Chinese celebrities refuse to work with them.
However, the negative reaction against H&M, the first foreign retailer to express its concern, has been particularly harsh. Unlike other brands, its products are not available on major Chinese e-commerce sites such as Tmall and JD.com.
U.N. experts and human rights groups estimate that more than a million people, mainly Uighurs and other Muslim minorities, have been detained in recent years in a vast system of camps in China’s western Xinjiang region.
Many former inmates have claimed that they were subjected to ideological training and abuse in the camps, while China denies all charges of abuse.