Key facts
- The Persson family, owners of H&M, has increased its stake in the company this year.
- H&M CEO Daniel Erver's turnaround efforts have not yet significantly boosted sales or share price.
- The family's holding company, Ramsbury Invest, has purchased 36.8 million H&M shares in 2024.
- The Persson family and related entities owned over 68% of H&M's shares by the end of August.
- Deutsche Bank analyst Adam Cochrane expects the family to take H&M private by 2030.
- H&M's sales fell 1% in the first quarter and were flat in the second.
The founding Persson family of H&M is reportedly increasing its stake in the fashion retailer, a move that has fueled speculation about a potential privatization. This comes as CEO Daniel Erver's turnaround efforts have yet to significantly boost the company's share price or sales.
Ramsbury Invest, the family's holding company primarily owned by Stefan Persson, has acquired 36.8 million H&M shares this year. According to H&M's website, the family and related entities held over 68% of the company's shares by the end of August, an increase from 49.5% at the beginning of 2021.
Sverre Linton, chief legal officer of the Swedish Shareholders' Association, suggested that the family's strategy appears to be a slow buyout, noting that shareholders might be receptive to a "decent" cash offer. Under Swedish regulations, a shareholder owning 90% of a company can compel the purchase of remaining shares.
Deutsche Bank analyst Adam Cochrane anticipates that the Persson family will take H&M private by 2030. H&M directed inquiries about the share purchases to Ramsbury Invest, whose spokesperson declined to comment on privatization plans, stating only that the family are "long-term owners" who "believe in the company."
H&M has faced challenges in increasing sales due to reduced consumer spending and intensified competition from online retailers like Shein and Zara owner Inditex. The company's stock has seen a significant decline, losing more than 50% of its value since its 2015 peak. Erver, who became CEO in January 2024, has been tasked with improving profitability and strengthening the brand, but sales have remained stagnant, falling 1% in the first quarter and remaining flat in the second. Analysts project only modest growth for the third quarter, with H&M scheduled to report its results on Thursday.