Fast fashion giant H&M is in a fashion crisis. After years of sluggish growth and relentless challenges, CEO Helena Helmersson has abruptly stepped down. Can her successor, Daniel Ervér, mend the seams and reignite the brand's spark?
Unveiling a New Face: Helmersson's four-year reign was turbulent, marked by the pandemic, boycotts, war, and an ever-growing shadow from rivals like Shein. Under her watch, H&M lost its sales crown to Zara and struggled to reconnect with younger shoppers. Now, 42-year-old Ervér, a company veteran, takes the helm, tasked with navigating a treacherous retail landscape.
From Crisis to Crisis: The pandemic dealt a brutal blow, shutting stores and crushing sales. Then came the Xinjiang cotton controversy, alienating Chinese customers. Russia's invasion further squeezed profits, forcing store closures and fueling inflation anxieties. These blows forced H&M to shift focus from sales growth to profitability, leading to layoffs and store closures.
Beyond H&M: Diversification became a key strategy. Helmersson expanded beyond the core H&M brand, nurturing other labels like Cos and Weekday, and venturing into sports, beauty, and homeware. But despite these efforts, H&M's recovery lagged behind competitors like Zara, raising concerns about its future growth potential.
Numbers Tell a Story: Sales in 2023 finally exceeded pre-pandemic levels, but Zara owner Inditex grew significantly faster. H&M now aims for a 10% profit margin (last achieved in 2017) and plans to double sales by 2030. Analysts remain skeptical, calling these targets "unachievable."
The Ervér Era Begins: The new CEO inherits a daunting task. He promises to prioritize profitability and pursue the set goals, but admits it's too early to unveil a concrete plan. He believes investments in the H&M brand have improved responsiveness to fast-changing trends, allowing them to compete with ultrafast fashion rivals.
Can He Succeed?: With the Persson family, founders of H&M, still holding majority control, the question lingers – can Ervér stitch together a winning strategy amidst fierce competition and lingering doubts? Only time will tell if he can be the tailor H&M needs to regain its former glory.
