H&M said Wednesday it would halt production of all angora products, but won't remove existing products from its stores.
The high street retailer said it will inspect suppliers in the coming weeks to ensure they are not plucking.
"We only allow products made of angora rabbit hair from farms with good animal husbandry," the firm said in a statement.
The store is offering customers refunds if they want to return products made from the wool.
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PETA spokesperson Ben Williamson said consumers must pressure retailers by "turning their backs on angora."
There was no humane way to remove fur from angora rabbits, he said. Animals that have their fur cut, rather than plucked, have their legs tied with ropes, and are stretched over a board or suspended in the air.