People passing a large scale sign for the high street clothes and clothing brand H&M outside their flagship store on the corner of Oxford Street and Regent Street. on 30th March 2023 in London, United Kingdom.
Mike Kemp | In Pictures | Getty Images
Shares of Swedish retailer H&M were down nearly 10% at 11:20 a.m. London time on Wednesday, after the company announced weaker sales and the surprise departure of its chief executive.
H&M sales were 1% lower for 2023 in local currencies, and 4% lower year-on-year in the fourth quarter.
The company has struggled to maintain sales growth in recent years amid increasing competition, both from high street rivals such as Inditex-owned Zara and from online fast-fashion stores.
On Wednesday, H&M reiterated previous messaging that it is focusing on cost control and profitability.
Operating profit in the full year ending Nov. 30, 2023 more than doubled, coming in at 14.5 billion Swedish krona ($1.4 billion), up from 7.17 billion krona the year before. But H&M’s fourth-quarter operating profit margin slid, coming in below market expectations.
European retailer stock were 1.2% lower in morning trade.
In an unexpected leadership shake-up at the H&M group, Helena Helmersson, who has been in the CEO role for four years, will be replaced by Daniel Erv├йr.
In a statement, Helmersson said she was stepping down with “mixed feelings” and was proud of how the firm navigated the pandemic and geopolitical challenges.
“However, it has been very demanding at times for me personally,” she said.
Erv├йr is currently the head of the group’s largest brand, H&M, and has been at the company for 18 years.
“The H&M group is in a strong position, with a positive profitability trend and good conditions to make further improvements in 2024,” group chair Karl-Johan Persson said.
“Daniel is a competent, experienced and respected leader and has the qualities needed to continue to develop the H&M group.”
H&M share price
