H&M posts weak sales, CEO steps down

ISTANBUL

Swedish retailer H&M Group posted weak sales and its CEO stepped down from her role Wednesday, while the company's shares plummeted over 12%.

The multinational clothing company said the group’s net sales in the fourth quarter amounted to SEK 62.65 billion ($6.02 billion), decreasing by 1% in local currencies, according to its financial results statement.

The group’s sales declined by 4% in local currencies during the period between Dec. 1, 2023 to Jan. 29, 2024, compared with the same period of the previous year.

"For many consumers, the year was marked by lower purchasing power because of high inflation and high interest rates," CEO Helena Helmersson said in the statement. "The fourth quarter started with unusually hot weather in several of our important European markets."

Helmersson, 51, who has worked for 26 years within the H&M Group, the last four years as CEO, stepped down from her role.

"It is with mixed feelings that I have informed the board of directors of my decision to leave the CEO role," she said in a separate statement.

"However, it has been very demanding at times for me personally, and I now feel that it is time to leave the CEO role, which of course has not been an easy decision."

Daniel Ervér, 42, who has worked in the H&M Group for 18 years, was appointed as the new president and CEO.

"Together with all committed colleagues, we will continue to create unbeatable value for our customers and profitable growth," he said in the statement.

Amid the reshuffling in the top executive position and weak sales, H&M's stock price plummeted 12.37% Wednesday on the Nasdaq Stockholm exchange.

Helmersson had announced in November 2022 that it will lay off 1,500 employees in a cost-cutting move that was expected to save the company around SEK 2 billion ($192.3 million) per year.

H&M was criticized the same month amid a report that the company's suppliers in Bangladesh that manufacture clothes for the group allegedly contaminate water, turning entire rivers biologically dead.

The company said in November last year that it will pay more for suppliers in the South Asian country in order to make up for a higher wage for workers.

The Swedish Commercial Employees' Union, Handels, said earlier Wednesday that discontent is rising among H&M store employees who have had their working hours shortened.

Sweden's third-largest blue-collar trade union said in February 2023 that H&M employees were informed that their services will be converted to a significantly lower employment rate.

The first time that H&M announced a notice about services in October 2023, it affected around 400 positions in Sweden. Shortly afterwards, Handels came out and assessed that it was rather 1,500 positions that would be affected at 69 Swedish stores.

In 2023, about half of Sweden's 2,100 H&M store associates were offered changed working hours or a new role in the company.