Story
H&M Founding Family Boosts Stake, Fueling Speculation of a Take-Private Deal
Summary
The billionaire Persson family has steadily increased its ownership in H&M to over 68%, prompting market speculation that the struggling fast-fashion retailer could be taken private.
The founding family of H&M is significantly increasing its ownership stake in the company, fueling speculation among investors that a move to take the fast-fashion retailer private could be on the horizon as its business turnaround struggles to gain momentum.
A Gradual Buyout
The Persson family's holding company, Ramsbury Invest, has acquired 36.8 million H&M shares so far this year, according to regulatory filings. This buying has lifted the family's total ownership to more than 68% of the company's shares as of the end of August, a substantial increase from 49.5% at the beginning of 2021, company data shows.
This steady accumulation has led market watchers to anticipate a potential privatization. "It is very difficult to view it any other way than that their strategy is to slowly buy out the company," said Sverre Linton, chief legal officer of the Swedish Shareholders’ Association, in a comment to Reuters. Under Swedish law, an investor holding 90% of a company can compel the purchase of the remaining shares. Adam Cochrane, an analyst at Deutsche Bank, expects the family to take H&M private by 2030.
Persistent Business Headwinds
AdThe share purchases come as H&M navigates a challenging retail environment. The company has struggled with intense competition from rivals like Zara-owner Inditex and online behemoth Shein, as well as a pullback in consumer spending. The company's stock has lost more than 50% of its value since its 2015 peak.
Efforts to reignite growth under CEO Daniel Erver, who took the helm in January 2024, have yet to show significant results. Sales fell 1% in the first quarter and were flat in the second. Some analysts believe that operating as a private entity would allow management to implement long-term strategies without the pressure of public market scrutiny.
Family's Official Stance
When asked about the possibility of taking the company private, a spokesperson for Ramsbury Invest declined to comment on specific plans. The spokesperson told Reuters, "The Persson family believes in the company, are long-term owners and have historically increased their ownership over time."
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