H&M abandons the dividend reinvestment plan

The Swedish group abandoned the plan to reinvest dividends in newly issued shares to finance investment in the digital sector. Too complicated!

H&M will no longer ask, as initially planned, shareholders to reinvest (rather than collect) their dividend payouts in newly issued shares.

The idea was to use those funds to finance investments in the analysis and technology sectors, but the plan proved problematic.

“The investigation has shown that the reinvestment plan would be difficult to implement, both from a technical perspective and because of time constraints," the company said.

After decades of rapid expansion of the stores, the company, already down by 44% since the end of 2016, has struggled in the last two years to respond to the increase in e-commerce, with the growth in sales and the price of shares down. In 2017 H&M had a net debt of 500 million crowns and grew by 4% in sales, but saw the profit fall. Also for this reason, during the current year, 170 boutiques will close in the face of 388 openings and will push on the omnichannel with Afound, a new format with which it will market lower-priced products not only for H & M brands, but also for brands outside the group .

Abandoned the reinvestment plan, H&M will propose to pay an unchanged dividend of 9.75 SEK per share for the 2016/2017 fiscal year, to be paid in two installments, one in May and the other in November.