What: H&M has shut its flagship Shanghai store, its latest closure in China where consumer demand has slumped amid Covid-19 lockdowns and faced a backlash against companies that refuse to use Xinjiang cotton.

Why it is important: The world’s second-biggest fast-fashion retailer entered China in 2007 with the opening of the Shanghai flagship store. H&M had more than 500 stores in mainland China early last year but its website currently only lists 376, including the flagship Shanghai store.

Although nearly a month has passed since Shanghai lifted a strict two-month lockdown, consumers have yet to return to malls in significant numbers.

Chinese consumers have also beat a retreat from its products after a letter in which H&M expressed concerns about allegations of forced labour in the Xinjiang region came to light in 2021.

H&M Closes Shanghai Flagship Store