By Helen Reid
STOCKHOLM (Reuters) – Swedish fast-fashion retailer H&M is working to buy more of its clothes and accessories from suppliers closer to its key markets in Europe and the U.S., its finance chief told Reuters on Thursday, in part to prepare for potential U.S. import tariffs.
“For many reasons we need to create a more regionalised supply chain, both for geopolitical reasons, learning through COVID that we need to create more resilience in our supply chain, and also to support responsiveness and the customer offer,” Adam Karlsson said in an interview after H&M’s quarterly results.
Potential U.S. tariffs on imports are also pushing H&M to seek suppliers closer to its U.S. market, Karlsson said, adding that the retailer had drawn up scenarios for such trade barriers, which he called a “concern”.
“Of course it is a factor, and there are certain countries under higher scrutiny connected to trade barriers, and we’re monitoring that as we move ahead,” he said, adding that the fact H&M sources from a wide range of countries was an advantage.
H&M is exploring options to source more products from Central America, Karlsson said, to serve markets including the U.S. and Brazil. For Europe, it is sourcing more from Turkey and looking to build its supplier base in Morocco and Egypt.
U.S. President Donald Trump has made multiple threats about tariffs including on imports from Mexico, Canada, China, and the European Union, and has also floated the idea of a blanket tariff on all imports, which retailers and economists have said would drive prices up.
“If tariffs increase for everyone, there will be a relative position to take (on pricing),” Karlsson said. “We should position our offering in the same way no matter whether there are tariffs or not.”
H&M has not disclosed country-level sales for 2024, but in 2023 the U.S. was its second-biggest market by sales, accounting for 14% of total revenues.
(Reporting by Helen Reid; Editing by Mark Potter)
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