H&M has been dumped by FC Barcelona as its official sponsor over fears the retailer’s ongoing state-backed boycott in China would hurt sales.
H&M had agreed a deal with Barcelona’s star football team to become the sponsor of its official uniform, thought to be worth around €3 million a year.
However, FC Barcelona has now scuppered the deal over fears it would jeopardise sales in China, one of its most lucrative markets.
— Kerstin Lundgren (@KerstinLundgren) July 24, 2021
The controversial decision comes amid an ongoing boycott of the Swedish fashion giant in China, seeing hundreds of stores closed and its ecommerce operations largely scrubbed from the country’s insular internet.
Earlier this year H&M became one of a host of western fashion brands including Nike, Adidas, Gap, Fila, New Balance, Zara, and Under Armour to be added to a Chinese “blacklist” of brands after government affiliated groups alleged they were “spreading rumours to boycott Xianjiang cotton”.
It came after the UK, EU, US and Canada voted to impose sanctions on China over numerous reports of forced labour, mass sterilisation of women and a raft of other human rights abuses against Uighur Muslims in the Xinjiang region.
#DUB = Don’t Upset Beijing @FCBarcelona made the “heroic” decision to end sponsorship w/ H&M since the company announced that it would not use forced labor for harvested cotton in it’s products. https://t.co/eiXgwOVLvp
— Theresa Fallon (@TheresaAFallon) July 22, 2021
In response to the sanctions, any brands who have stopped using cotton from the region or spoken out against alleged forced labour have been accused of spreading “lies and disinformation” about China.
FC Barcelona has been criticised on social media for its decision, which lays bare just how much influence China holds over brands across the globe who rely on its huge population to generate revenue.
The 101-year-old football team has, like almost all sports teams, lost out on millions in revenues during the pandemic.
While H&M’s sponsorship deal would have generated millions for the company every year, its clear that a potential loss of sales in China would have been far worse.
In its first quarter sales published earlier this month, H&M reported a 28 per cent decline in sales in China, which represents around five per cent of total sales.