Swedish fashion giant H&M is accelerating its shift toward regional supply chains, aiming to source more clothing and accessories from suppliers closer to key markets in Europe and the U.S. The move comes as the company braces for potential U.S. import tariffs, its finance chief told Reuters on Thursday.
“For many reasons, we need to create a more regionalized supply chain—geopolitical uncertainties, lessons from COVID-19 on resilience, and the need to improve responsiveness for customers,” said Adam Karlsson in an interview following H&M’s quarterly results.
Concerns over possible U.S. trade barriers are also influencing the retailer’s supply strategy. “It’s definitely a factor,” Karlsson said, adding that H&M has prepared scenarios to navigate potential tariff increases. “Certain countries are under greater scrutiny when it comes to trade barriers, and we’re monitoring that closely.”
To mitigate risks, H&M is looking at sourcing more from Central America to better serve the U.S. and Brazilian markets. In Europe, the company is expanding its supplier network in Turkey, Morocco, and Egypt.
Former U.S. President Donald Trump previously threatened broad import tariffs, including on goods from Mexico, Canada, China, and the EU—measures that retailers warn could drive up consumer prices. Karlsson suggested that H&M’s pricing strategy would adapt accordingly. “If tariffs rise across the board, we’ll reassess our positioning, but our approach to the market remains the same.”
While H&M has not released country-specific sales figures for 2024, the U.S. was its second-largest market in 2023, contributing 14% of total revenue.