Being raised in Sweden, (and H&M is a Swedish company) I'm assuming that few Swedes would consider the message racist. To an American it's obvious but to most Swedes there is no correlation between the message and the model.
But it was a terrible mistake and one that should never have happened. A bit of international and cultural awareness would sure come in handy.
It would also be a good idea to have the PR department read up on the ramifications of such a deeply offensive message and respond accordingly. When it comes to public relations I find Sweden many times lack experience in handling emergency PR correctly. They could learn a thing or two from Americans.