As H&M posted its full-year results today, it was revealed that veteran chair Stefan Persson is stepping down after 20 years in the role to be succeeded by his son Karl-Johan Persson.
Karl-Johan’s move up left the chief executive position available and it has been filled by Helena Helmersson – the first woman to lead the fast-fashion powerhouse.
Helmersson has spent almost her whole career working her way up the ranks at H&M, which generated sales last year of more than SEK230bn (£18bn). Her appointment makes Helmersson one of the most powerful women in global retail.
Who is she?
Swedish-born Helmersson has a master’s degree in international business administration and nearly 23 years under her belt at H&M, where she has held a variety of roles.
Helmersson told Retail Week: “I’m very excited and happy about the new role. It’s a big responsibility obviously but I have a fantastic team around me, so I believe it’s going to be a very exciting journey.”
Helmersson was most recently chief operating officer – a post she held for just over a year – and before that spearheaded sustainability for five years.
Voted Sweden’s most powerful woman in business by the weekly magazine Veckans Affärer in 2014, Helmersson has already made her mark on the fashion industry and her promotion cements her place at the top.
Helmersson is proud of the influence she has had on H&M over the years.
“I was fortunate to lead several of our important group functions and have been part of the plans around supply chain and logistics and production, but also in the digital space with IT and AI and I have also worked on the expansion,” she said.
But with several brands to oversee, including Arket, Cos, Weekday and Monki, she will have a lot on her plate.
Challenges facing the new boss
Despite pleasing news today for H&M that it grew pre-tax profit by 11% to SEK17.39bn (£1.39bn) in its latest financial year, further analysis shows underlying challenges remain for the retailer as its margin increased by only 10 basis points over the period. Operating margin, which had fallen consistently since 2015, edged up by just 10bps as well. This demonstrates some improvement but shows there is still work ahead for Helmersson.
Revenue was up by 8% in the UK, its third-largest market, but the rate of growth has slowed in the rather difficult territory in recent years owing to low consumer confidence.
A particular weak spot for the retailer is its operations in the Asia and Oceania region, where its operating margin has sunk from almost 7.5% to 3.1% over the last five years. H&M has failed to adapt to fierce online competition in the region, as an increasing number of lower-priced fast-fashion retailers have sprung up, and as in the UK has fallen victim to consumer’s increasing appetite for sustainability.
Transitioning into her new role, Helmersson will need to take a firm grasp of H&M’s transformation work, ensuring its rapid expansion into new markets, whether through online or physical spaces, does not come at the expense of profitability. A clear focus on transparent sustainability is a must for the retailer, which has previously been criticised for “greenwashing” its marketing strategy. Eleanor Smith, Retail Week Prospect
What will she bring to the role?
Practicology principal consultant Stephanie Firth said Helmersson has an arsenal of skills to tackle the job ahead.
“Her appointment is more evolution than revolution,” she maintained. “Helmersson will have an in-depth understanding of the workings of the company globally and how to keep it relevant to the end consumer.
“Her background in product and sourcing should arm her with the knowledge to position the business for future success as this is an area they seem to have lost ground to Inditex on.
“She has led innovations in key areas such as logistics and production that could provide H&M with a competitive advantage in areas where other retailers have been much slower to advance, thereby establishing a strong foundation for long-term growth.”
“She lives the values in a fantastic way. She’s a respected leader, open-minded, courageous and good in many ways”
Karl-Johan Persson, H&M
But Firth said it won’t all necessarily be plain sailing.
She observed: “Her challenge will be the practice of implementing and engaging a sustainable and agile supply chain from a social and environmental point of view across the whole organisation, and encouraging the brands to follow the same direction and do everything to contribute while maintaining speed, agility, cost efficiency and price.”
Karl-Johan Persson speaks highly of Helmersson.
He said: “We have a unique company culture and very strong company culture and she knows that very well and she lives the values in a fantastic way.
“She’s a respected leader, open-minded, courageous and good in many ways.”
With the backing of the board, it would seem Helmersson should have the support she needs to face any headwinds coming her way over the next few years.
What will her main priorities be?
Firth said Helmersson will have the ongoing shift in retail to contend with, including Brexit in the UK and challenges in the wider economy such as in China.
“Keeping H&M in financial stability while future-proofing the brand to remain relevant in the eyes of the consumer will be key,” she said.
“With an unstable environment in the UK, other areas of international growth should be a pillar of her strategic plan and looking to further expand into areas of Latin America, Asia and the Middle East.”
With its results, H&M set out a plan to focus on integrating its physical and digital offers, investing in technology and securing the best product assortment.
Persson and Helmersson will work together to execute that plan.
“We can improve in every area and we can continue to adjust the plan with every change in the market,” Persson said.
With a track record and unrivalled loyalty to H&M, it is no surprise Helmersson was the number-one choice to succeed him.
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“Her longevity at the company makes her a valuable asset, along with the fact she has been in multiple roles, which will stand her in good stead,” Firth explained.
“Sustainability is an industry and consumer buzzword, with pressure being put on fast-fashion chains to innovate. Her previous roles and long-term vision to improve sustainability make her a clear successor.
“The challenge lies in product [and] sourcing and bridging the gap between consumers and production, and they definitely have a journey ahead in this regard,” Firth added
Persson said: “I think the board has made a great decision. She has great experience from many different roles in the company. I’m convinced she will do a fantastic job.”
H&M’s share price climbed 9% following the results statement. Investors are clearly confident the retailer is in a good place as Helmersson takes over. The City is happy – now she just needs to keep the shoppers satisfied.
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