H&M’s Chief Executive Officer, Helena Helmersson, made a surprising announcement on Wednesday, stepping down from her position after a four-year tenure. This unexpected leadership change at one of the world’s largest fashion retailers came alongside the release of the company’s latest financial results.
In her statement, Helmersson expressed pride in the achievements made during her time as CEO, particularly navigating through the challenges posed by the pandemic and various geopolitical and macroeconomic factors. However, she acknowledged the personal toll the role had taken and felt it was time to move on.
Replacing Helmersson as CEO is Daniel Erver, who previously served as the head of the H&M brand, the largest brand within the group. H&M’s portfolio also includes well-known brands such as & Other Stories and COS.
The decision by Helmersson to step down was driven by a lack of energy to continue in the demanding role, with no concrete plans for her next career move. However, her departure comes amidst challenging financial results for H&M, as the operating profit margin fell to 7.2% in the fourth quarter of the financial year, down from 7.8% in the previous quarter.
While sales increased over the course of the 2023 financial year, there was a significant 4% drop in the past two months, including the crucial Christmas period, compared to the previous year. These disappointing figures led to a sharp decline in H&M’s stock price, with shares plummeting over 9% in midday trading in Stockholm and a 14% decline since the beginning of 2024.
Helmersson attributed the challenges in part to lower purchasing power due to high inflation and interest rates, as well as unusual weather patterns affecting sales in key European markets. Additionally, H&M has faced other hurdles including reworking its supply chains, discontinuing operations in Myanmar, and addressing marketing missteps such as a controversial school uniform advertisement in Australia that sparked backlash on social media.
Despite these difficulties, H&M remains committed to addressing consumer concerns and improving its operations moving forward. The company expressed regret over the offensive nature of the advertisement and promptly removed it from circulation.
As H&M navigates these challenges and transitions to new leadership, stakeholders will be closely watching to see how the company adapts and evolves in the ever-changing landscape of the fashion industry.