H&M boss quits as retail giant loses ground to rivals

H&M Group’s chief executive has quit with immediate effect as the fashion giant struggles to grow sales against intense competition.

Helena Helmersson, 51, who joined the Swedish business in 1997 before rising through the ranks to become CEO four years ago, said the role he role had been ‘very demanding’ and later told reporters she did not have the energy to continue.

H&M on Wednesday posted revenue growth of just 1 per cent for 2023 on a local currency basis, with sales in decline in the fourth quarter when operating profits were lower than expected at 4.33billion kronor.          

The figures bring an end to a tumultuous reign for Helmersson, who saw profits plummet by 88 per cent in her first year as rival retailers like Shein and Zara owner Inditex gradually won market share at the group’s expense.

Last year, Zara surpassed H&M to become the second-biggest apparel seller in Europe, just behind Nike, which overtook the Stockholm-based firm the previous year.

H&M was also hurt by flatlining summer sales caused by unfavourable weather conditions and the decision to limit price hikes amid elevated inflationary pressures for households.

Helmersson’s replacement is Daniel Erver, who has worked at H&M for 18 years, most recently as head of the H&M brand.

Erver, 42, was previously managing director and also responsible for merchandising in the company’s US and German operations, as well as business unit director for both menswear and womenswear.

Karl-Johan Persson, chair of H&M Group, said: ‘[Helmersson] decisively and effectively led and navigated the H&M group through a time largely marked by pandemic, geopolitical and macro-economic challenges.

‘During this time, we have gradually taken clear steps towards our long-term goals. The H&M group is in a strong position, with a positive profitability trend and good conditions to make further improvements in 2024.’

The new appointment comes on the same day H&M declared annual results showing total net sales grew by 6 per cent to 236billion Swedish kronor in the year ending November.

Trading was uplifted by greater demand for the firm’s ‘portfolio brands,’ like COS, Arket and Weekday, and growth across the Americas and Western Europe despite cost-of-living pressures and some stores shutting.

Operating profits also more than doubled to 14.5billion kronor, which Helmersson credited to higher gross margins from an improved supply chain and a ‘continued normalisation of the external factors that influence purchasing costs.’ 

In addition, sales have dropped by 4 per cent since the start of December, partly because of increased costs from reducing prices. 

Following publication of the results, H&M shares slumped 7.3 per cent to 156.02 kronor on Wednesday morning.