Dividends and H&M to lay off staff in drive to cut rising costs

In the retail world, the holiday season leading to Christmas is the quarter where profits are to be made. In is expected that in the following quarter people will generally spend less at the retail store as they pay down debts or build up savings and in the northeast the weather changes to colder. People consider going south to warmer areas of the world or there is never a lack of things to spend money, it usually does not go to the retail stores. After January, one expects to see retail stores cutting staff or hours to meet less demand.

In an article by Stine Jacobsen of Reuters, Swedish fashion giant H&M will cut 1,500 jobs primarily in Sweden where it is headquartered. H&M employees 155,000 worldwide. The prime reason for cuts is to safe money due to keeping the lights on and heating the buildings is increasing unaffordable with energy prices so volatile. H&M has many stores in Europe and due to the Ukraine conflict, there is less Russian gas which has pushed up energy prices.

In addition, the prime competition to H&M is Spain’s Zara and British fashion retailer Primark who are trying to woo customers.

H&M had 170 stores in Russia which are now closed as the clothes are sold.

Linking to dividend paying stocks, all companies have quarters which they tend to do better in, if the quarter which is traditionally their best quarter is not going well you should seek alternatives. If the company is doing great in quarters that are traditionally a little slow, then have higher expectations for the good quarters. If expectations meet reality, then you can do nothing and wait for the next quarter. Reality versus expectations helps make decisions to do or not to do.

There are more questions than answers, till the next time – to raising questions.


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