More than a week after the Swedish retailer H&M came under fire in China for a months-old statement expressing concern over reports of Uyghur forced labor in the region of Xinjiang, a major source of cotton, the company published a statement saying it hoped to regain the trust of customers in China.
In recent days, H&M and other Western clothing brands expressing concern over reports coming out of Xinjiang, including Nike and Burberry, have faced an outcry on Chinese social media, including calls for a boycott endorsed by President Xi Jinping’s government. The brands’ local celebrity partners have terminated their contracts, Chinese landlords have shuttered stores and their products have been removed from major e-commerce platforms.
Caught between calls for patriotism among Chinese consumers and campaigns for conscientious sourcing of cotton in the West, some other companies, including Inditex, the owner of the fast-fashion giant Zara, quietly removed statements on forced labor from their websites.
On Wednesday, H&M, the world’s second-largest fashion retailer by sales, published a response to the controversy as part of its first quarter 2021 earnings report.
Not that it said much. There were no explicit references to cotton, Xinjiang or forced labor. However, the statement said that H&M wanted to be “a responsible buyer, in China and elsewhere” and was “actively working on next steps with regards to material sourcing.”
“We are dedicated to regaining the trust and confidence of our customers, colleagues, and business partners in China,” it said.
During the earnings conference call, the chief executive, Helena Helmersson, noted the company’s “long-term commitment to the country” and how Chinese suppliers, “at the forefront of innovation and technology,” would continue to “play an important role in further developing the entire industry.”
“We are working together with our colleagues in China to do everything we can to manage the current challenges and find a way forward, ” she said.
Executives on the call did not comment on the impact of the controversy on sales, except to state that around 20 stores in China were currently closed.
H&M’s earnings report, which covered a period before the recent outcry in China, reflected diminished profits for a retailer still dealing with pandemic lockdowns. Net sales in the three-month period through February fell 21 percent compared the same quarter a year ago, with over 1,800 stores temporarily closed.