H&M Group’s turnaround plan is still ongoing despite a lift in full-year profits and sales, head of investor relations Nils Vinge has told Drapers.
H&M, owner of brands including H&M, Cos, & Other Stories and Weekday, had an 11% increase in net sales to SEK232.8bn (£18.57bn) between 1 December 2018 and 30 November 2019. Growth was driven by more full-price sales, lower markdowns and increased market share.
H&M Group did not disclose details of the individual brands, but Vinge said & Other Stories is performing well: “New business [such as & Other Stories] increased sales in the financial year by 17% in SEK and by 16% in local currencies compared with the previous year.”
Vinge attributed H&M’s overall success to a combination of factors: “We have a very long-term view and very strong teams, and we learn from each other. Our owners are a founding family that are very much controlling the company with a proven track record for this business, who want to continue to grow the company.”
H&M said today that its transformation work, which began in 2018, continues to bear fruit.
Vinge added: “We don’t really talk about the turnaround because we have been growing and been profitable every year. We’re still in transformation mode in every brand in every function. It’s an ongoing thing for the group and its been ongoing for a while, and something we’ve been investing in for a while. Gradually we expect to see the benefits.”
In its trading update, H&M warned of plans to axe more than 175 stores this year as part of restructuring plans across Europe. A number of branches, primarily H&M stores, will be closed in the coming months across Europe, the US and China.
The group also plans to open 200 new stores internationally, primarily in Eastern Europe, China and South America.
However, Vinge warned these figures could change as the group has “around 1,000 stores coming up for renegotiation this year”.
Meanwhile, H&M announced today that its chairman Stefan Persson is to step down from the role on 7 May, and will be succeeded by H&M Group CEO Karl-Johan Persson.
H&M chief operating officer Helena Helmersson has become CEO of the H&M Group, effective today.
“There are lots of talented people at H&M and Helena has been working for here for more than 20 years, she is very well respected, appreciated and she really lives the H&M Values”, Vinge said. “We are very appreciative for her leadership.”