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H&M Group (Hennes Mauritz AB) launched its 2018 sustainability report this week with a fanfare. By 2030 it aims to use only recycled or other sustainability sourced materials and by 2040 it wants to be 100% climate positive. The world's second-largest clothing retailer (in sales), whose brands include Cos, And Other Stories, Weekday and Monki, currently sources 35% of its materials from recycled and sustainably sourced materials.
Outside the H&M store in the Sollentuna shopping centre north of Stockholm, whose plate-glass windows had been covered in red SALE posters the last few weeks, Måns Flodholm, a 15-year-old student, was less convinced. He wasn't going to the store. “I don’t buy clothes from H&M - ever,” he said.
Why? Was it the merchandise? “No. Don’t you know they burn their clothes that they don’t sell?” he asked.
Last year, a documentary on Danish t.v., Operation X, alleged that H&M had been accused of burning 12 tonnes of unsold but usable clothes. Bloomberg also reported that H&M was burning discarded clothing alongside recycled wood and trash at the Västerås combined heat and power station, as part of the latter's conversion to becoming a fossil-free facility by 2020.
According to Greenpeace, the incineration of reject clothes is a common practice worldwide. I asked H&M if it was true it burnt usable clothing. It said:
For H&M to send our products to destruction is very rare, and when we are obliged to do it, it is always as last option and only for those garments that cannot be reused – including donations – or recycled. These may be, for example, products that have failed certain chemical safety tests or that have been affected by mold during transportation, and are therefore not safe to be reused or recycled. As we said, this happens in very rare instances.
H&M has been going through a rough patch recently. Its shares stand at a 5 year low while last year, it recorded its first fall in quarterly sales for more than two decades. Over the 2017 financial year, sales growth was little over 3%. The company has admitted it got its stock orders wrong at the H&M brand, leading to the need for widespread clearance sales.
Earlier this year, H&M got into trouble over its advertisement for its Monkey hoodie, which depicted a black child wearing the eponymously named hoodie. Edward Adoo reflected the views of many in The Independent when he said that as a black person, he felt uncomfortable about the ad. “The problem here doesn’t lie in the supposed racism of H&M, but instead in their misguidedness,” he wrote. “Their intention was clearly not to cause offence; it just obviously didn’t enter their minds to think seriously about their black customers.”
In a similar fashion, the response to the clothes burning inquiries doesn't quite tally with a recent acknowledgement by chairman Stefan Persson, the son of H&Ms founder, that the company needs to be more transparent. The company told me it 'rarely' burnt clothes. But what does 'rarely' mean? If there is a problem with the chemicals in the clothes that the company is burning, what happens to the environment when they are burnt? In 2010, the company was forced to change its policy of cutting up unsold garments rather than giving them to the needy, following a report in the New York Times. The clothes burning image won't go away either. There is, as the saying goes, no smoke without fire.
Despite tough conditions, H&M believes it can grow sales this year by more than 25%. It is going to focus more on online sales and slow down store openings. This year it will open 390 new shops (rather than 479 in 2017) and shut 170 (almost twice as many as last year), the biggest number of store closures since at least 1998.
At its first capital markets day this year, H&M illustrated that apparel is the world’s second-largest consumer industry after packaged food. But if it is this big, how many more clothes do we need? And critically, how do you persuade a teenager concerned about sustainability and the environment to buy a T-shirt? Retailing today is about understanding data and responding quickly, but retailing tomorrow may be much more about understanding the minds of teenagers like Måns.
