H&M CEO exit amid sales slump raises market concerns

H&M, the popular Swedish fashion retailer, made an unexpected announcement, revealing a change in leadership. Outgoing CEO Helena Helmersson decided to leave the company after four years, citing the demanding nature of the role. She will be replaced by Daniel Ervér, who has been with H&M for 18 years, previously heading the core H&M brand.
This leadership change at H&M occurred concurrently with the announcement of a 4 percent decline in sales for December and January compared to the previous year. However, H&M's shares further dropped by 8 percent following the announcement of the leadership change and disappointing sales figures. Analysts expressed concerns about the company's ability to meet its profitability targets, with doubts raised about the credibility of its 10 percent operating margin goal.
H&M faces stiff competition from rivals like Zara and Shein, both of which have seen strong sales growth. The company has been focusing on profitability over sales volume, aiming to achieve a 10 percent operating margin.
H&M's chairman, Karl-Johan Persson, expressed optimism about the company's prospects for improvement in the coming year, despite the recent challenges.