H&M unexpectedly announced this morning (Wednesday) a change at the top of the company, with Daniel Arver taking over as CEO in place of Helena Helmerson. Shares of the Swedish fashion retailer fell 10% this morning following the announcement of the change and the statement that in the last two months of December-January, which are considered a strong period As this is the Christmas shopping season, the company suffered a 4% drop in sales compared to the previous year.
Helmerson, who served for the past four years as CEO, explained at the press conference that the decision to leave was due to personal reasons. "The position is very demanding and left me without energy." Arver, 42, who has been with the company for 18 years and in his last position served as brand manager, stepped into her shoes immediately .
Helena Helmerson and Daniel Arver,
H&M is the world's second-largest fashion retailer after Indices, and the company appears to have struggled to compete with Zara and fast-fashion giant Shine, both of which have shown strong sales growth in the past year.
According to experts, it is possible that the reason for the resignation is the fact that Helmerson did not meet the goals and this is the reason for the replacement of the CEO. H&M has recently focused on profitability and not on sales volumes, as it aims to reach an operating profit of 10% in the coming year, in the meantime it is reducing costs by closing stores and layoffs.
"Good conditions to make improvements later this year", photo: Gideon Markowitz
"The target of 10% profit remains, we will work hard to achieve this target," Arver told Reuters.
Karl-Johan Persson, chairman of H&M and grandson of founder Erling Persson, said the company is in a strong position with "good conditions to make further improvements over the coming year."
H&M, known for fashionable clothes and affordable prices, at an average of NIS 100 per item, may change its pricing strategy in order to reach its goals, according to analysts.
Does this mean prices will go up?
"The price mix will be more important now," said Andreas Lundberg, an analyst at SEB in Stockholm.
"In the last decade, the company has focused on increasing sales volumes and opening stores, but it is also more expensive to handle both at the level of warehouses, transportation of goods and of course salaries. That is why we may see a change in the pricing of the items."
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