The H&M distribution centre in Hamburg is being reduced in size, with several hundred jobs being cut over the next few months, according to German news publication, Hamburger Abendblatt.
However, in an official statement to Just Style the retailer explains it “has no intention or current plan” to close the logistics centre in Hamburg, Germany.
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The spokesperson states: “H&M Logistics does not expect that the planned moves of parts of the operations, which are a common practice in our logistics network, will impact the running lease of the property in Hamburg, Germany, in any way.”
H&M relocates some logistics operations to Eastern Europe
The spokesperson points out some operations will be relocated to a “self-operated logistics centre in Poland as an interim solution until a new highly automated logistics centre that H&M is building in the Czech Republic comes into operation”.
This aligns with H&M’s first quarter earnings report for 2023 which stated: “Preparations continue for the planned logistics centre in the Czech Republic” and its full year 2022 report suggested the “new logistics centre in the Czech Republic” was “scheduled to open at the end of 2025”.
The retailer’s 2022 sustainability report also highlights the company is innovating across its global network by developing these new, highly automated logistics centres.
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By GlobalDataThe report reads: “These [logistics centres] are designed to create additional capacity, flexibility and speed between sales channels, enabling improved availability.
GlobalData associate apparel analyst Alice Price tells Just Style: “Amid continued lacklustre results, H&M’s decision to reduce the size of its Hamburg distribution centre and relocate some of its operations to Poland, signifies the growing financial pressure the brand is under as it attempts to cut costs to protect its margins.”
She suggests “relocating part of its operations to Eastern Europe, will enable the brand to save on labour costs, where the statutory minimum wage is much lower than in Germany”.
The H&M spokesperson argues logistics processes are continuously analysed and adjusted as necessary and states: “The primary goal is to constantly improve assortment availability in the sales channels and to ensure store delivery in a flexible and forward-looking manner in order to optimally meet today’s customer-oriented fulfilment requirements.
The expected timeframe for the planned move to the site in Poland is the first half of 2024 with the spokesperson adding that “flexible responses to specific market conditions are basically standard practice in our logistics network”.
H&M says it has already negotiated the planned move to the Czech Republic with the local works council in Hamburg, Germany, and launched a volunteer programme as a first step. The implementation of this measure will now be evaluated internally and show whether further measures would have to be implemented.
The spokesperson shares the team at its distribution centre in Hamburg, Germany, processes and delivers H&M brand products to shops in several European markets. Around 790 people are currently employed there and at the end of 2022, around 850 people were employed at the distribution centre in Hamburg, Germany.
