STOCKHOLM : Sweden’s H&M, the world’s second-biggest fashion retailer, saw the pandemic pummel it to a slightly deeper than expected loss in the second quarter and said it was ramping up store closures even as trade slowly emerged from lockdown hibernation.

H&M, which had warned in April it would swing into a loss in the three months through May, said it had increased price cuts, which squeezed the gross margin, and warned of a high level of markdowns also in the third quarter.

“Rapid adjustments to product purchasing and buying plans meant that the stock-in-trade was able to be reduced somewhat in the second quarter compared with the previous year,” Chief Executive Helena Helmersson said in a statement.

“However, since there is an oversupply of spring products throughout the industry, and the market remains weakened, we expect markdowns in relation to sales to increase again in the third quarter.”

Pretax loss was 6.5 billion crowns ($695 million) against a year-earlier profit of 5.9 billion. Analysts had on average forecast a 6.4 billion crown loss, according to Refinitiv data.

H&M said sales so far in June were down 25% in local currencies. It had on June 15 reported a 50% drop in second-quarter sales as measures to slow the COVID-19 pandemic slammed the sector.

H&M said 7% of its more than 5,000 stores remained temporarily shut against around 80% at the height of lockdowns. It said it would speed up closures and open fewer new stores this year than previously planned, resulting in a net reduction in stores.