Background: H&M is the Swedish fast-fashion giant founded in 1947, now operating more than 4,000 stores across 75+ countries. When it landed in Australia in 2014, it was a full-blown retail moment - the first Melbourne store drew 15,000 people on opening day.

What happened: After years of riding that momentum, H&M’s local performance has softened, with sales down 4% over the past year to $340 million. On top of the sales slump, H&M is now under investigation by the Fair Work Ombudsman for allegedly underpaying as many as 1,500 staff.

What else: And as the pressure builds, the retailer has been rationalising its Australian footprint. In fact, it's cut down from around 50 stores to just 34 over the past couple of years. The downsizing shows quite a shift in how H&M sees the local market.

What's the key learning?

💡Store footprint rationalisation is a fancy way of saying a retailer is trimming locations to match demand. When foot traffic falls or costs climb, even big-name chains have to rethink how many stores they can sustainably operate.

💡H&M’s decision to cut nearly one-third of its Australian stores shows a clear strategic reset - fewer mega-stores and a bigger push toward e-commerce as consumer behaviour shifts.

💡And it's a slow and steady path for H&M Australia. After posting a -1% profit margin last year, H&M Australia inched back into the black with a 0.5% margin. So not quite explosive growth, but a step in the right direction.