H&M and Starbucks Reportedly Set to Exit Moroccan Market Amid Challenges

The end of the presence of the H&M and Starbucks brands in Morocco? Le360 provides more details on the reasons for the probable departure of the Moroccan subsidiary of the Kuwaiti group Alshaya. "We know that these two brands have been doing badly for several months," confides a member of the Network Trade Federation, affiliated with the CGEM, to the media. According to him, the probable departure of these two brands from Morocco has nothing to do with the boycott campaign against brands deemed close to Israel. This is evidenced by the "total liquidation" operation launched by H&M in its stores well before the surprise and spectacular attack by the Palestinian Islamic movement Hamas and the Israeli retaliation. "Since Covid, business has been very bad. The inflation of recent months has been the final blow. H&M and Starbucks have not been spared, and they are not the only ones," adds the same source, noting that stores of Fnac, Tati, Maisons du Monde, or other franchise brands of clothing have had to be closed.

According to a source close to the management of Alshaya’s Moroccan subsidiary, two other factors would explain the probable departure of these two brands from Morocco. These are the multitude of rates related to customs duties, deemed high, and which vary according to the origin of the imported articles (Asia, Turkey, etc.), as well as a heavy tax burden, in particular the professional tax, the amount of which depends on the rental value of the business and not on the turnover, knowing that the existence of the brands concerned has exceeded the tax exemption period, limited to five years, she explains. This departure, which should take place on December 15, would also be justified by the announcement made by H&M in early October 2020. The Swedish brand had announced its intention to close more than 250 stores worldwide. It has already closed up to 80% of its points of sale.

In December 2021, the Kuwaiti group Alshaya, owned by Kuwaiti businessman Mohamed Alshaya, was forced to reduce its capital (from 142 million to 65 million dirhams) to clear the accumulated losses due to the health crisis. Previously, it had been forced to close other brands in its portfolio in Morocco, including American Eagle Outfitters, Mothercare, Pinkberry, Next and Payless. This Alshaya group, which has been established in the kingdom since 2011, has 18 Starbucks points of sale, spread across five cities (Casablanca, Rabat, Marrakech, Kenitra and Tangier), in addition to four franchised H&M stores in Casablanca (two units), Rabat and Marrakech.