The coronavirus pandemic that reached Europe in the first quarter of 2020 reduced the economy of families, countries and companies. Among the latter, firms linked to fashion consumption suffered greatly, particularly in the early stages of covid-19, which in Spain led to the declaration of the first state of alarm on March 14, 2020 and to the confinement of the population during weeks. Commerce giants like H&M were forced to close their stores. And when things improved and they reopened, they were still aware of the onslaught of the disease, which in successive waves forced new closures and adjustments. All this process is meticulously reflected in the 2020 annual accounts that the subsidiary of the Swedish textile group has filed in the commercial register. The numbers are overwhelming: H & M’s profits in Spain decreased last year to 3.84 million, compared to 11.99 million in 2019. It is 68% less.
But earnings weren’t the only numbers to shrink with COVID-19. The group’s sales in Spain fell 40% last year, to add 398.6 million, compared to more than 666 million the previous year. And as a consequence of the lower income, the tax bill also decreased. The firm of Swedish origin paid the Treasury just over 521,000 euros in income taxes last year, compared to about 3 million in 2019.
On the expense side, personnel expenses were also contained, which went from 140.5 million in 2019 to 106.5 million last year. The company —which last April proposed the layoff of 1,100 people in Spain and the closing of 30 stores, although later it reduced those figures to less than 400 exits— accounted for almost 1,000 fewer employees last year, going from 5,977 to 4,986. Almost all the reduction corresponded to temporary workers due to the lower hiring in this modality (from 965 jobs in 2019 to 49 last year) while the permanent workforce was thinned by 75 employees, for a total of 4,937. The firm records 23 layoffs in its accounts in the fiscal year, which formally ran from December 1, 2019 to November 30 of last year.
Four ERTEs in a year
What the staff did not get rid of was the temporary employment regulation files (ERTE). Four processes of this type were undertaken by H&M in Spain. The first affected store and warehouse personnel and started on the same day as the first state of alarm. The second was done in offices and was presented on April 14. Both were concluded at the end of June, with the premiere of the so-called “new normal”. Then two others arrived that coincided with the new waves of the pandemic during the autumn and the measures of the autonomous communities to contain it: one of them affected personnel in Castilla y León, Catalonia and Asturias; and the other, to employees in Andalusia. As a result of the public bonuses derived from these ERTEs, the Spanish subsidiary is recorded in the chapter of subsidies 7.1 million, which in reality are not an income it received, but amounts that it stopped paying to Social Security.
However, the average remuneration of H&M Spain employees rose slightly, from 19,186 euros in 2019 to 19,639 euros in 2020. For the bulk of workers, framed in the sales and distribution categories, the average salary was 18,720 euros. The average remuneration of the executive staff was 52,854 euros. The gender pay gap (the difference between what male employees earn on average compared to their female colleagues) is calculated at 6% and is mainly due to the section on managers, where men earn 8% more than female employees. women. This difference exceeds 2% between engineers and technicians and between sales and distribution personnel, while in administrative jobs, women earn 6.6% more than men. The most direct impact of the covid on employees resulted in an increase in absences due to illness, which went from 842,000 hours in 2019 to more than one million hours in 2020.
Along with the ERTEs, the renegotiations of the rental contracts of its stores in Spain were another of the company’s strategies to contain spending. According to the accounts, last year 74.5 million were allocated to the lease of premises, compared to 94.2 million in 2019. What barely changed was the number of stores, with 166 establishments in Spain. It is one less than in the previous year because three were closed, but two were opened. One of them was a Weekday establishment, which opened in the country and joined the other brands already present in Spain: H&M (the group’s flagship, which has 153 stores and divisions of women’s, men’s, children’s and textile fashion of home), COS and & Other Stories. Hennes and Mauritz SL is the Spanish subsidiary of the textile giant, which controls the company with a capital stake of over 99.9% through its Swedish parent company.