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.
A take-private would be “based on emotional rather than financial motives,” Ekman wrote, given that the family already has a controlling stake and has long managed the company with little regard for minority shareholders.
He attributed the push to patriarch Stefan Persson, 77, who built H&M into one of the world’s largest fast-fashion retailers during his 16 years as chief executive officer and more than two decades as chairman. He remains deeply invested in the company’s future.
Stefan’s fortune amounts to $18.6 billion, mostly in H&M stock, making him the richest person in Sweden, according to the Bloomberg Billionaires Index. He bought the 3,000-acre Ramsbury estate in 1997 and has since expanded it to 19,000 acres, building a brewery, distillery and oil press on the property.
His son Karl-Johan, who took over as H&M chairman in 2020 after serving as CEO, also holds an active role at Ramsbury Invest. He has voiced frustration in interviews with the stock market’s short-term focus on maximizing profits.
“They’ve never, at least in modern times, expressed a strong desire to remain public,” said Daniel Schmidt, an analyst at Danske Bank. “I would say that transparency has always been a part of it.”
H&M’s shares reached an all-time high about a decade ago, and have since fallen by around 60%, valuing the group at 220 billion kronor. Zara owner Inditex SA, by contrast, has climbed about 60% over that period.
For the Perssons, the sagging stock price is no doubt a frustration, but also presents an opportunity by making full control more attainable. At the current price it would cost the family at least 70 billion kronor to buy the remaining outstanding shares, according to Ekman. That would likely require them to take on debt.
A delisting would probably also require a premium, according to Bloomberg Intelligence analyst Charles Allen.
“If the bid were financed by debt then it may reduce the company’s operating flexibility,” Allen said. “It wouldn’t really matter if the debt was in the company or the family as either way cash flow would have to be diverted from investment to pay interest and then repay.”
Operationally, the fast-fashion retailer appears stuck in the slow lane, facing tepid demand for its apparel, fierce competition and now US tariffs. The first-quarter results were weaker than analysts had expected and showed that efforts to claw back customers through higher marketing spending hadn’t brought a rebound.
CEO Daniel Erver, an H&M veteran who took the top job last January, was involved in setting the current strategy and has yet to reverse market share losses in countries including Germany, France and the UK. Attempts to reconnect with younger audiences through collaborations, such as with pop artist Charli XCX, haven’t significantly boosted growth.
“With the share price as subdued as it is currently, offering a small premium today, could potentially be cheaper if the share price recovers at some point in the future,” said Mads Lindegaard Rosendal, a senior analyst at Danske Bank. He said the potential risk of a take private is one of the reasons why Danske Bank has an ‘underweight’ rating on H&M, which is a “company that is also struggling somewhat with their ongoing operational turnaround.”
As one of the most shorted stocks in Europe, a buyout could force short sellers to unwind their negative bets on H&M and send the shares soaring. Shares out on loan, an indication of short interest, were at 21% of H&M’s free float as of June 4, according to data from S&P Global Market Intelligence.
H&M has been criticized for a lack of transparency over sudden management changes and being the only company in Stockholm’s benchmark index not to disclose the shareholdings of its top executive team.
“Obviously, being a listed company puts management under more scrutiny than if they were private, but it also presumably offers some incentives to management and other employees that would not be available if it were private,” BI’s Allen said.
Anders Oscarsson, the head of equities at AMF, one of Sweden’s biggest pension managers and the largest non-family shareholder, said he hasn’t heard the family say anything about taking H&M private, and that such a move would be a big loss for investors.
“It would be sad if the company disappears from the stock exchange,” he said. “If we’re to generate returns from the stock market, we need strong companies listed.”
Yet if the family’s purchases lead to a marked deterioration in the stock’s liquidity, that wouldn’t be a good outcome either. “It might become a bit like Hotel California — where you can neither check in nor check out.”
