Doha – Swedish fashion giant H&M is looking to strengthen its manufacturing presence in Morocco as part of a strategic shift to counter potential US trade barriers, the company’s finance chief revealed last week.
In response to mounting concerns over US President Donald Trump’s recent tariff threats, H&M is accelerating its move toward regional supply chains, with Morocco emerging as a key production hub for European markets.
The company’s CFO Adam Karlsson told Reuters that potential US import tariffs are pushing the retailer to reorganize its global supply network.
“For many reasons we need to create a more regionalized 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,” Karlsson said in a January 30 interview.
The move comes as Trump has proposed various tariff measures, including a universal tariff on all US imports that could start at 2.5% and increase monthly, according to recent reports.
This proposal, backed by Treasury Secretary Scott Bessent, has prompted H&M to develop contingency plans for its US market, which represented 14% of its total revenues in 2023.
“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,” Karlsson explained, highlighting the company’s strategy to diversify its supply base.
The retailer’s renewed focus on Morocco comes after a period of significant changes in its retail presence in the country.
In December 2023, amid speculation about H&M’s departure from Morocco, its regional operator AlShaya Group implemented a restructuring that led to the closure of the brand’s Casablanca location, while maintaining operations in Marrakech and Rabat.
AlShaya Group, which manages H&M’s operations in Morocco, issued a statement at the time, assuring its commitment to the country despite the retail adjustments.
These changes occurred during a broader regional reorganization by AlShaya, which also operates other international brands in the country.
The retailer is specifically targeting Morocco and Egypt to build its supplier network for European operations, while simultaneously exploring Central American options for its US and Brazilian markets.
“If tariffs increase for everyone, there will be a relative position to take,” Karlsson noted, underlining the company’s proactive approach to potential trade barriers.
This strategic pivot transforms H&M’s relationship with Morocco from purely retail operations to potentially deeper supply chain integration, driven by global trade uncertainties and the need for regional resilience.
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