H&M quietly moving brand toward private ownership
Hennes & Mauritz AB
, the
fast-fashion retailer
that's been listed on the Swedish
stock market
since 1974, is steadily moving back toward
private ownership
.
The founding family has stepped up purchases of
H&M
shares, spending more than 63 billion kronor ($6.6 billion) since 2016 to amass nearly two-thirds control and fueling speculation it could take the Stockholm-based company back into private hands - despite denials from family members.
The Perssons, one of Sweden's wealthiest families, have built up a growing stake through holding company
Ramsbury Invest
, saying little about their intentions other than that they "believe" in H&M, which was founded in 1947 by Erling Persson. The media-shy clan is now getting within striking distance of full control of the retailer, which in recent years has been losing ground among shoppers to its main rival
Zara
and "ultra-fast fashion" upstarts like
Shein
.
"This is something we've been talking about for years, and few would doubt that's the direction things are headed," said Sverre Linton, chief legal officer and spokesperson for the Swedish Shareholders' Association, which represents small stock investors. If the family doesn't plan to take H&M private, it should communicate that more clearly and stop buying shares, he added.
The family has ramped up insider buying by reinvesting dividends, boosting its H&M stake to almost 64% from 35.5% over the past nine years via Ramsbury, a vehicle named after billionaire Stefan Persson's sprawling estate, one of the largest private landholdings in southern England. Including extended family holdings, the Perssons now control roughly 70% of the capital and some 85% of voting rights, according to H&M's website.
In an interview last year with Bloomberg, H&M Chairman Karl-Johan Persson - grandson of the founder - dismissed talk that the family intended to take the company private. "There are no plans," he said. "We just buy because we believe in the company."
Representatives at Ramsbury Invest and H&M declined to comment.
Analysts including Niklas Ekman at DNB Carnegie say the regular purchases could be more than a show of confidence in the retailer. In a note to clients last month, he estimated that if the family keeps acquiring shares at the same pace a buyout could come as early as two years from now. If the family's holding reached 90%, it could request a de-listing of the shares.
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