H&M workers in Spain call off July strikes following a wage agreement
Unions representing workers at Swedish fashion chain H&M’s stores in Spain have called off further strikes in July after reaching an agreement on a wage increase, a union leader and the company said Wednesday.
The CCOO and UGT unions had extended the protests to July 1 and 8, at the height of H&M’s sales season, to also demand a reduction in workload.
“Today, H&M and the social partners have signed the final agreement that meets the identified needs of H&M Spain employees,” the company said in a statement.
“The package of measures approved includes details related to in-store sales incentives, minimum guaranteed value for responsibility functions, salary increase for sales advisors, increase in effective in-store resources and information rights,” it added.
H&M had initially agreed to pay an additional 1,000 euros ($1,091) to store clerks in Spain over the next 14 months and will now also give additional monthly bonuses linked to sales performance until 2025, said CCOO union leader Maria de los Angeles Rodriguez.
The fashion retailer has also agreed to hire more workers to reduce the overall workload of all its employees in 91 stores across the country, Rodriguez added.
Lola Luna, leader of UGT, said the full agreement will be signed in mid-July.
The workers decided to protest after wage negotiations, which had lasted months, failed to reach an agreement. Workers had complained that the retailer paid less than its main competitors, including Zara, owned by Spanish group Inditex.
Most H&M workers in Spain work part-time, about 24 hours a week, and earn less than 1,000 euros a month, said some employees who took part in a protest outside one of the fashion chain’s stores in Madrid on the first day of the strikes.
Spain accounts for 3.7% of H&M’s global workforce of 106,000 stores, 75% of which are women, according to its 2022 annual report.
European stock markets rise on H&M’s boost
European stock markets were rising on Thursday, boosted by H&M’s advance after the Swedish retailer posted a higher-than-expected profit, although hawkish comments from a string of central bank chiefs kept risk appetite at bay.
The pan-European STOXX 600 index was up 0.1% at 0704 GMT, a day after the heads of major central banks, including U.S. Federal Reserve Chairman Jerome Powell, signaled that further tightening of monetary policies is needed to control inflation.
H&M shares were up 7.3% to more than one-year highs after the world’s second-largest fashion retailer beat expectations for quarterly operating results and said its third-quarter sales are also off to a good start.
The rise pushed the European retail sector 1.1% higher, while automakers were the second best performers in sector terms.
Renault advanced 4.2% after the French automaker raised its full-year financial outlook following the success of its recent launches.
Meanwhile, preliminary data showed that consumer prices in Spain rose by 1.9% year-on-year in June, just below the 2% threshold for the first time since March 2021.
H&M reported earnings of €325 million in its fiscal first half, a year-on-year decrease of 2%.
H&M
Swedish fashion chain Hennes and Mauritz (H&M) reported a net profit of SEK 3,828 million (€325 million) in the first half of its fiscal year (December-May), representing a year-on-year decrease of 2%.
According to the company, this result was negatively affected by the high cost of raw materials and freight rates, the strong dollar, energy prices and the effects of the closure of operations in Russia due to the war in Ukraine.
Its main competitor, Spanish retailer Inditex, posted an operating profit of SEK 5,466 million (EUR 464 million), down slightly by half a percentage point.
H&M’s net sales reached 112,488 million kronor (9,558 million euros), an increase of 1% in local currency and 9% in Swedish kronor.
In the second quarter (March-May), net profit was SEK 3,288 million (€279 million), a decrease of 11% compared to the same period in 2022. Operating profit decreased by 5% to SEK 4,741 million (EUR 403 million).
Net sales amounted to SEK 57,616 million (EUR 4,896 million), almost unchanged from the previous year in local currency and 6% higher in Swedish kronor.
As of May 31, H&M had 4,399 stores open, 303 fewer than the previous year, with more than half of the closures attributable to Russia and Belarus.
Helena Helmersson, CEO of H&M, noted that they are making important steps toward their goals and that the summer collections have been well received. She also noted that the third quarter is off to a good start and that conditions for improved growth and earnings continue to develop favorably.