H&M Possibly Moving Procurement Unit To Mainland China, Cutting Hong Kong Employees

The international fashion chain H&M is rumored to be planning to relocate its procurement department from Hong Kong to Shanghai or Guangzhou in mainland China.

According to reports in Hong Kong media, the relocation will reportedly affect 50 to 70 employees in Hong Kong. The company will first consider internal transfers; however, these employees will reportedly be dismissed if not enough positions are available.

A spokesperson from the headquarters of H&M told media that the company decided to move its two departments in Hong Kong to Guangzhou and Shanghai, respectively, to be closer to its supply chain and production line in mainland China, aiming to improve operating efficiency. About 70 Hong Kong employees will be affected by the decision and these employees will gain compensation for dismissal or internal transfers. Meanwhile, H&M's other units in Hong Kong will remain unchanged.

In 2007, two full-concept H&M stores opened in the Shanghai, both placed in city-center locations. Since then, H&M has expanded rapidly in China with new stores now opening weekly. By the end of February 2012, the company had 89 stores in China.

Hong Kong was the first step in H&M's expansion into the densely populated Far East markets. A full-concept H&M store opened its doors in spring 2007 and has since been followed by another ten retail outlets. H&M group's other brand Monki arrived in Hong Kong with a much-publicized store-opening in 2010 and was followed by COS in 2012.

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