- Stefan Persson, chairman of the H&M group of retailers, is stepping down after more than two decades of leading the board, according to a press release.
- Persson released a succession plan Thursday that would replace him as chairman with the company's current CEO, Karl-Johan Persson, who is Stefan Persson's son and the grandson of the fast-fashion retailer's founder. The transition plan was submitted to a nomination committee.
- The board named COO Helena Helmersson as the next CEO, to replace Karl-Johan Persson, effective immediately. The company also named a new chief financial officer and appointed the current CFO to chief of the formal parent company of H&M, Ramsbury Invest.
To Stefan Persson, the time was right for the leadership change, though a Dow Jones story described the shuffle as "unexpected." In the release, Persson said that "we have gradually improved profits and have a strong position with many well-established brands, millions of customers worldwide and good financial strength."
That was on display in 2019, with the retailer group's total sales increasing 11% during the year (6% in local currencies), according to a separate press release issued Thursday. Pre-tax profit for the year was up 11% as well. Karl-Johan Persson said in a statement that the profit increase was due to a rise in full-price sales and reduced markdowns. According to data compiled by The Wall Street Journal, 2019 marked the first year H&M was able to raise its operating margin in almost 10 years.
The profit and sales improvements in 2019, Karl-Johan Persson said, were among the "fruit" of the company's turnaround efforts, which have included investments in digitization, logistics, technology infrastructure, analytics and artificial intelligence. In search of profit and sales, the retailer has also recently scaled back brick-and-mortar expansion plans while increasing its e-commerce and omnichannel efforts.
Kate Ormrod, lead retail analyst at GlobalData, said in emailed comments that "[w]hile there remains work to do in order to fully satisfy consumers' demands, we expect H&M to continue to benefit from its vast future-proofing initiatives in 2020." Sales growth in December and January, Ormrod added, emphasize that H&M's "appeal and relevance have not wavered."
Now, after leading the turnaround as CEO, Karl-Johan Persson, who has been in the role for a decade, plans to turn the position over to Helmersson, who is the company's first female chief.
Helmersson started at H&M in 1997 as an economist in the company's buying department. Before becoming COO, she also served as the company's sustainability manager and production manager. As CEO, she'll keep moving the company along its strategic plan, she said in a statement, noting that she would have a focus "on the customer to continue strengthening our financial development in the short and long term."
"There is great potential to expand with existing and new brands, with new types of partnerships and to continue leading the development towards a sustainable fashion industry," Helmersson added.
Ormrod noted that H&M's focus on sustainability "is market-leading and apt given growing consumer interest, enabling H&M to deliver fast fashion with a conscience and at the same time casting shade on competitors such as Inditex." She added, though, that the retailer "must continue to invest in areas such as value for money and quality that truly matter as purchase motivators."