It was a gloomy read when clothing giant Hennes & Mauritz presented their quarterly report on Wednesday.

It appears that the company made a loss of SEK 1.389 billion before tax during the period 1 December-28 February.

This can be compared with the same period last year when the company instead made a profit of SEK 2.5 billion.

- This loss is still somewhat smaller than expected, says SVT's financial commentator Kristina Lagerström in Morgonstudion.

Boycotted in China

In the past week, the fashion company has been subjected to a boycott in China as a result of statements about forced labor in cotton production in the country.

Among other things, this has resulted in H & M's store signs being removed in several provinces.

It is also no longer possible to access the company's websites in the country.

The company name is also not searchable on Google.

Hennes and Mauritz have not commented on developments in China in the interim report.

However, they are expected to receive few questions about it at a press conference during the day.

- They have really been silent and have not said anything about it.

It is a very sensitive situation, says Kristina Lagerström.

"Fox scissors"

China accounts for five percent of the company's sales.

The country is also not considered a growth market for H&M.

But regardless of whether the boycott is temporary or not, the company is expected to have continued problems in the country, says Kristina Lagerström, who believes that the clothing giant is in "a foxhole".

- It is difficult for them to sell in China right now.

Then we do not know how this conflict will develop.

If it blows over or if it escalates and becomes something worse, says Kristina Lagerström.

Affected by the pandemic

A worse problem for H&M is the pandemic, which has resulted in a sales drop of about 20 percent.

During the year, the company received government layoff support and writes in the report that they hope for share dividends in the autumn.

But the fact that more and more of the trade takes place online has a negative effect on H & M's store concept, according to Lagerström.

- It's a big loss.

But they have received help from state support, otherwise the result would have looked much worse, she says.

- The biggest question is that we shop online more and more.

It is difficult for all chain stores to keep up with it.