H&M's Take-Private Play: A Calculated Move in a Retail Crossroads?

The retail sector is in flux, and H&M, once a titan of fast fashion, now finds itself at a crossroads. With its stock price down 9% year-to-date and a market cap of $19.7 billion as of June 2025, the Swedish giant is a shadow of its former self. Yet behind the scenes, the Persson family—founders and long-time shareholders—has been quietly buying shares. Their stake now stands at 64%, raising speculation that a full take-private could be in the works. Is this a strategic masterstroke, or a risky gamble? Let's dissect the numbers and market dynamics.

The Numbers: A Depressed Valuation and Strategic Opportunity

H&M's stock has been battered by a perfect storm of macroeconomic and operational challenges. The company's shares closed at 128.55 SEK on June 19, 2025—a drop of nearly 10% from the year's opening price and a far cry from its June 10 peak of 138.90 SEK (see

). This depressed valuation creates a rare opportunity for the Persson family to take the company private at a steep discount.

At its current market cap of $19.7 billion—down from $23.05 billion in December 2024—the firm is trading at roughly 12x its trailing twelve-month EBITDA, a valuation historically low for a major retailer. A take-private would require the Perssons to acquire the remaining 36% of shares they don't already own. At the June 19 closing price, this would cost approximately $7.1 billion (36% of $19.7 billion), a figure that could be manageable if the family leverages its financial resources or secures debt financing.

Why Now? Macro and Operational Pressures Favor a Delisting

The retail sector faces existential challenges. Tariffs, supply chain disruptions, and the shift to online shopping have hit traditional retailers hard. H&M, which relies on physical stores and rapid inventory turnover, has struggled to adapt. Its Q1 2025 sales fell 4% year-on-year, with management citing “challenging market conditions.” Delisting could offer critical advantages:

1. Operational Agility: Without quarterly earnings pressure, H&M could pivot faster to e-commerce, streamline its store network, or experiment with new business models without Wall Street's scrutiny.
2. Cost Control: A private structure would reduce listing fees, investor relations costs, and compliance burdens, freeing up capital for reinvestment.
3. Currency and Trade Risks: As a private company, H&M could better navigate currency fluctuations and trade policies without public market reactions amplifying volatility.

Risks: Financing and Regulatory Hurdles

The path to a take-private is fraught with obstacles. The Perssons would need to secure financing for the buyout, likely through debt. H&M's balance sheet—while stable—has net debt of around $1.5 billion, leaving limited room for additional borrowing. A leveraged buyout could push debt-to-EBITDA ratios into risky territory, especially if retail conditions worsen.

Regulatory hurdles also loom large. Swedish antitrust authorities might scrutinize the move, and global investors could push for a premium over current prices, increasing the cost. Moreover, if the buyout is delayed, rising stock prices could erase the current discount, making the deal uneconomical.

Investment Takeaway: A Compelling Speculative Play, but Proceed with Caution

For investors, the buyout speculation presents an intriguing opportunity. If the Perssons proceed, the stock could surge to reflect the premium buyers typically pay in take-private deals (often 20–30% above the current price). However, this is a high-risk, high-reward scenario.

Buy the dips: The stock's volatility—seen in its June swings between 125.20 SEK and 138.90 SEK—creates entry points. Investors bullish on the buyout thesis might accumulate shares around the 130 SEK level.

Wait for clarity: Hold off until the Perssons make a formal announcement. A delay or failure to secure financing could send shares spiraling.

Conclusion

H&M's potential take-private is a calculated move to reclaim control in turbulent times. While the depressed valuation and Persson family's stake make it feasible, execution risks loom large. For investors, the scenario offers a speculative angle on a beaten-down stock—but one that demands patience and a tolerance for uncertainty.

In an era where retail giants are rethinking their public listings, H&M's fate could set a precedent. Stay tuned.