By Agence France-Presse
The Persson family, which owns 45 percent of the capital in Swedish fashion retailer H&M, on Thursday denied rumours it was planning to buy back the rest of the company from stockholders, sending the share price falling.
H&M’s share price had risen by 10 percent on the Stockholm stock exchange over the past week on the back of “rumours without any substance”, Joakim Bornold, economist at investment bank Nordnet, told AFP.
On Thursday, the share was down more than five percent in midday trading, before regaining some ground. Just before the close, it was down 2.4 percent on a market up by one percent.
Since the beginning of the year, the Persson family has bought around 53 million H&M shares — or five percent of the total stock — through its holding group Ramsbury, sparking rumours of a buy-out.
On Monday, the rumour gained momentum after Stefan Persson, H&M chairman, sold part of his shares in tech group Hexagon through his investment group Ramsbury for two billion kronor (197 million euros, $230 million).
Was that sale aimed at freeing up cash to finance a Persson family buy-out of H&M, analysts asked.
Persson waved off the reports.
“There’s nothing to these rumours,” he told Swedish news site Breakit.
Joakim Bornold said he saw a buy-out as “highly unlikely”.
“The Persson family doesn’t have the financial muscles to buy the whole company so they need a partner to make it happen,” he said.
H&M, listed on the Stockholm exchange since 1974, has been hard hit by what analysts have termed the “retail apocalypse” sparked by the online shopping revolution, and has been slow to develop its online offering.
The H&M share price has shed almost 30 percent since June 2017.
The company’s net profit fell by 13 percent in its 2016-2017 fiscal year to 16.2 billion kronor, while sales rose just four percent to 231 billion.
That can be compared to its rival, Spanish textile giant Inditex which owns Zara, which posted a seven percent rise in net profit for its 2017 fiscal year.
H&M is due to present its second quarter results on June 28. (AFP)