H&M pledge more transparency ahead of capital markets day
Swedish fashion giant Hennes & Mauritz (H&M) has promised to provide greater clarity over its operations in response to an investor call concerned primarily with its Ecommerce business. The pledge was made as the company approaches its first ever capital markets day.
This event will see investors and management get together for a “group meeting” in February, as the former group expresses concerns over the company’s share price and profitability. H&M is the world’s second largest retailer, but it has been slow to adopt a strong online presence, and was caught out by the recent shift of fashion retail online. Companies like Zalando and Asos are putting pressure on it to tighten up its game.
Karl-Johan Persson, H&M’s CEO, spoke to the Financial Times recently, saying: “Especially now when we are not reaching the goals and the share price has been going down, it’s a good time to explain to shareholders how we see the business. We have that responsibility now to be a bit more transparent.”
Investors have welcomed this news, with many noting that capital market days are now the standard, and H&M’s reluctance to engage with shareholders in the past had been problematic. Joacim Olsson, chief executive of the Swedish Shareholders Association, said:
“H&M has not been sufficiently transparent in its information to shareholders. There are several examples of this, and the most obvious is their unwillingness to tell the market about how ecommerce develops in general and in different markets, and what margins they have in this part of the company. The fact that H&M gives very scarce information about its ecommerce development creates suspicion about how bad it really is. Growth by 25 per cent does not impress and does not say anything as long as H&M does not communicate the total volume.”
Soon, investors will have access to all the information they want, as H&M turns over a new leaf – both in regards to transparency and, if the company is to be believed, online retail.
Dominion holds H&M in its Global Trends Luxury Fund.
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