Business

H&M chief executive plans to double sales by 2030

Ambitious target set as fast fashion retailer’s sales recover and profit jumps 64%

H&M chief executive Helena Helmersson set an ambitious goal of doubling the fast-fashion retailer’s sales by 2030. Photograph: Mikael Sjoberg/Bloomberg

Fri Jan 28 2022 - 15:19

Hennes and Mauritz (H&M) chief executive Helena Helmersson set an ambitious goal of doubling the fast-fashion retailer's sales by 2030 after she reduced discounts and started clearing out the company's long-standing inventory buildup.

Ms Helmersson, who started leading H&M at the start of the pandemic, is also targeting an operating margin of more than 10 per cent within three years. She was brought in to replace the grandson of H&M’s founder in January 2020 and started off by reducing the Swedish company’s store count. The stock rose as much as 7.4 per cent Friday but later gave up some of those gains.

Ms Helmersson is trying to put her first two years on the job behind her as H&M makes progress in reducing unsold garments. Still, the CEO faces difficult competition as cut-rate discount upstart SheIn gains online clients worldwide and Zara owner Inditex keeps expanding at higher levels of profitability.

H&M also aims to cut its carbon emissions in half by the end of the decade.

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Analysts had been expecting 2030 sales to be about 50 per cent higher than the 2021 level, according to the average of four estimates.

The company is relying less on markdowns, which H&M expects will boost profitability in the first quarter. It is also reducing costs, planning net closures of 120 stores this year, mostly in Europe.

Pretax profit rose 64 per cent to six billion Swedish kronor in the three months through November, beating analysts’ estimates. Sales in December and January are up 20 per cent.

The company is rewarding investors with SKr3 billion share buyback program and it maintained its dividend at last year’s level. – Bloomberg

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