2024-01-31 12:59:39
Helena Helmersson, until now at the head of Swedish clothing giant H&M, has announced her resignation following the publication of disappointing results for the company.
The CEO of Swedish clothing giant H&M announced her resignation on Wednesday, following the group recorded results below expectations, causing a plunge in the company’s stock on the stock market. Helena Helmersson, who spent 26 years with the group and four years at its head, confided that her work had been “very demanding at times for (her) personally”, having gone through “the pandemic and several geopolitical and macroeconomics.
She is replaced at the helm of H&M by Daniel Ervér, promoted to this position internally. This new manager has worked for 18 years for the Scandinavian group with 101,000 employees. “Making external recruitment has never been an alternative,” assured the TT agency, the chairman of the board of directors of H&M, Karl-Johan Persson. The new CEO “knows the company, its culture,” he stressed.
After this announcement and the publication of results lower than analysts’ expectations, the group’s shares fell on the Stockholm Stock Exchange. Around 10:45 a.m., the stock lost 9.67%, to 152.02 crowns, in a market down 16.28% Under the leadership of Helena Helmersson, the price of H&M stock collapsed by almost 20%, falling from 207 crowns in 2020 to a low of 151.74 crowns on Wednesday morning.
“For many consumers, the year was marked by a decline in purchasing power due to high inflation and interest rates. Despite this, our net sales in comparable markets increased compared to 2022 “, noted the outgoing CEO in the group’s quarterly report.
End of year 2023 below expectations
Over its entire staggered financial year, which runs from December 2022 to November 2023, H&M multiplied its net profit by 2.5, reaching 8.75 billion crowns (776 million euros), while its figure of business totaled 236 billion crowns, thanks to higher sales and higher margins, despite the contrary effect of inflation in many of its markets.
In the fourth quarter of this 2022-2023 financial year, its operating profit stood at 4.33 billion crowns, an amount below that expected by analysts who were counting on 4.76 billion. In addition, H&M, world number two in clothing following the Spanish group Inditex, owner of Zara, announced on Wednesday a drop in its sales at the start of its current financial year: -4% in December and January compared to the same period one year ago.
In 2022, H&M’s withdrawal from Russia following Moscow’s invasion of Ukraine and a cost-cutting program cost the Swedish group nearly 2.6 billion crowns. “Our work to improve the supply chain and the continued standardization of external factors that influence purchasing costs have helped strengthen the gross margin,” H&M said in a statement on Wednesday.
Nearly a hundred stores closed in one year
In 2023, the group closed around a hundred stores and strengthened its online presence. According to its annual report, it has 4,369 stores worldwide, 96 fewer in a year. The group, which in addition to its flagship H&M includes brands such as COS, Arket, &Other Stories and Monki, sees “good conditions for continued profitable and sustainable growth in 2024”.
Its objective is to “increase sales by 10 to 15% per year while maintaining high profitability”.
Its new CEO believes that the group is currently “stronger” than a few years ago. “The cash flow is better, as is the stock situation,” underlined Daniel Ervér to the TT agency.
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