On January 31, Swedish fast fashion company H&M Group appointed Daniel Ervér as its new chief executive officer. Ervér, who was previously the group’s head of brands, takes over from former CEO Helena Helmersson.
The new CEO, Ervér, is now 42 years old. Since joining H&M in 2005 as a summer intern, he has held a variety of positions, including merchandising and purchasing manager.
His predecessor, Helmersson worked for the group for 26 years, the last four as CEO. However, during her tenure, H&M’s market capitalization declined by one-fifth due to a pandemic, excess inventory, and increased competition from other companies such as SHEIN. H&M’s operating margin for the fourth quarter of 2023 also fell to 7.2% from 7.8% in the third quarter.
In recent years, SHEIN, which sells ultra-low-priced items for under $10, has gained phenomenal popularity among consumers and has come to account for a large share of the fast fashion market. Against this backdrop, H&M faced a “continued decline in sales even during the crucial holiday shopping season last December and January.”
Under these difficult circumstances, Ervér must show “how H&M can increase profits while growing sales.” The newly formed group will need to focus on increasing sales this year, rather than on cost and inventory management, which were the main focus until last year.
On the other hand, H&M’s full-year report indicates that sales of higher-priced brands such as COS, Arket, and Weekday have been strong, contributing to the group’s earnings.
“The H&M group is in a strong position, with a positive profitability trend and good conditions to make further improvements in 2024,” said Karl-Johan Persson, Chair of the H&M group. “As Helena has now chosen to leave the CEO role, we are pleased to appoint Daniel as CEO of the H&M group today. Daniel is a competent, experienced and respected leader and has the qualities needed to continue to develop the H&M group,” he continued.
New CEO Ervér stated, “Together with all committed colleagues, we will continue to create unbeatable value for our customers and profitable growth. Our focus will be on offering our customers the best combination of fashion, quality, price and sustainability in an inspiring and attractive shopping environment.”