Hennes & Mauritz is still run like a small family business, focusing on long-term results and maintaining the founder’s informal management style, despite being one of the biggest clothing retailers in the world, according to the Swedish group's chief executive.
In an interview with the Wall Street Journal, family member Karl-Johan Persson said H&M tends not to react as strongly to short-term market pressures as other publicly quoted companies.
"If you are a public company it's very tempting to do what's best in the short term. It's not a problem to pump up profits — we could easily do that — but we have to balance the short term and the long term," he said.
The group reported an 18% fall in its third-quarter net profit in October.
Persson, who began working at the family business in 2005 in an operational role, succeeded non-family Rolf Eriksen as the group’s chief executive four years later.
"My grandfather [Erling Persson, who founded the fashion group in 1947] wanted H&M to always have the mindset of a small company. There is no room for prestige here. We insist on an open-door policy and no hierarchies," Persson told the newspaper, adding that he tries to follow in his grandfather's footsteps by running the family business in an unbureaucratic way.
The 36-year-old, who was one of CampdenFB’s top 50 family business leaders in 2011, added that H&M wants to expand in China in 2012, despite increased competition in the market.
"We have entered cities like Changchun, Nanjing, Guangzhou and Kunming, and are planning to open stores in several cities next year," he said.
The Persson family controls 37% of the Stockholm-based company’s common shares and 69% of its voting rights. Karl’s father, Stefan Persson, serves as the group’s chairman.