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H&M to shut hundreds of stores in online shift

H&M says it will close hundreds of stores next year as it accelerates a shift to online retail. Julian Satterthwaite reports.

Video Transcript

- H&M is set to close hundreds of stores, not because it's doing terribly badly, though. On Thursday, the world's number-two fashion retailer said third-quarter profits were better than expected. They fell less than it had forecast to just over $265 million. But the Swedish firm says it's accelerating a shift to online selling. That will see it close a net 250 stores next year, or about 5% of its current network.

Earlier this year, H&M saw sales halve and posted a steep loss, its first in decades. But the chain has bounced back from this year's troubles. All but 3% of its stores are now open again. And sales in September were only down 5% on last year's level. Cost cutting efforts have also paid off.

Now, chief executive Helena Helmersson says the worst is over for the company. And investors seem to like what they hear. H&M shares rose over 8% in early trade Thursday.