H&M Spain loses 21% profit: lessons for footwear

H&M Spain: a thermometer for textile retail that also affects footwear

The close of H&M's fiscal year 2025 in Spain leaves figures that invite reflection across all retail, including the footwear sector. The Spanish subsidiary of the Swedish giant recorded a net profit of 12.2 million euros, 21.3% less than the previous year, with revenue of 469.2 million euros, 2.23% below the prior year. These figures, published in the Mercantile Registry and collected by Informa D&B, are not an isolated case: they reflect a trend of margin pressure and structural transformation affecting the entire value chain, from manufacturer to retailer.

The reduction of the commercial network is one of the most striking moves. H&M has gone from 120 to 113 stores in Spain, with two openings and nine closures, and has reduced its average workforce by 491 employees, down to 2,465 workers. This restructuring is not a simple cost adjustment: it responds to a deliberate strategy of optimizing the store portfolio, with contract renegotiations, selective expansions, and renovations. For footwear, this move is a clear warning: profitability per square meter and operational efficiency matter more than the number of points of sale.

What this news means for a footwear store

For an independent footwear retailer or a small chain, H&M Spain's decline has several practical takeaways. First, it confirms that the Spanish consumer remains sensitive to price and shopping experience but does not forgive a lack of value proposition. H&M maintains that its commercial reception "remains favorable," despite falling sales, indicating that the brand is prioritizing profitability over growth at all costs. A footwear store must apply the same logic: review its assortment, eliminate slow-moving references, and negotiate better terms with its wholesale suppliers.

Second, digitalization is accelerating. H&M has strengthened its online channel and its relationship with the digital customer, an area where many traditional shoe stores still have room for improvement. It is not just about selling online, but integrating channels: offering in-store pickup, agile returns management, and coherent communication on social media. Footwear is a tactile product, but the purchase decision is increasingly made online before visiting the store. A store that does not invest in its digital presence will lose traffic, even if its window display is impeccable.

Perspective for the footwear wholesaler

For the wholesaler, the H&M news is a double-edged sword. On one hand, the reduction of a retail giant's physical network can free up space in shopping centers and prime streets, which could open opportunities for footwear brands looking to expand. But it also implies that surviving retailers are more demanding: they ask for better prices, shorter delivery times, and greater flexibility in orders. The wholesaler that does not adapt to this new reality, with an agile offer and value-added service, will be left out of the game.

The drop in H&M Spain's EBIT, down 20.25%, is a reminder that margins are tightening across the entire chain. In footwear, wholesalers already face pressures from rising costs of materials, transport, and energy. The key lies in efficiency: optimizing logistics, reducing returns, and working with just-in-time stock. Furthermore, H&M's decision to distribute a dividend of 30 million to its parent company shows that, even in crisis, healthy companies seek to reward their shareholders. For a family wholesaler, this translates into maintaining healthy cash flow and not over-dimensioning inventory.

Context of the Spanish market

Spain is a particular market for footwear: with a strong industrial tradition in the south and east, and consumption that recovers slowly after inflation. The H&M news comes at a time when Spanish retail faces a double pressure: the rise of e-commerce and the concentration of retail in large operators. Independent footwear stores, which still represent a significant part of the channel, must differentiate through service and specialization. The H&M example shows that even large brands are not exempt from adjustments; the difference lies in how they are executed.

Optimizing the physical network and digitalization are not a fad, but a structural necessity to compete in Spanish retail.

For the footwear wholesaler, the Spanish context offers opportunities in segments such as safety footwear, school footwear, or comfort footwear, where demand is less cyclical. But it also requires constant vigilance of consumption trends and a rapid response capacity. H&M's restructuring is a mirror to look into: if an actor of its scale reduces stores and staff to be more profitable, a wholesaler must review its own cost structure and value proposition.

In short, the drop in H&M Spain's profit is not an isolated piece of textile news. It is a symptom of a retail sector in transformation, and footwear is no stranger. Players that adapt, with a coherent offer, efficient operations, and a clear digital strategy, will come out stronger. Those that remain anchored in the traditional model will see their margins erode like H&M's.

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