H&M Company Overview

Topics: Sweden, Karl Lagerfeld, Fashion design Pages: 8 (2381 words) Published: December 4, 2012
Clothing Retailing - UK - October 2012

What it does|Young fashion retailer. Market leader in Germany.| Latest year-end|November 2011|
Sales |SEK110 billion/€12.2 billion (+1.4%)|
Operating profit|SEK20,379million/€2,257 million (-17.4%) | Number of stores by fascia|2,472 (inc UK 213)|
Countries of operation|International|
Company data and competitor intelligence|For further company retail data please go to the following sections:Market sharesFinancials and outletsSpace allocationRetail product mixOnlineConsumer profiles|

What we think
Still room to grow
The poor performance in 2010/11 reflected the impact of recession in Europe, high cotton prices and the strength of the Swedish Krone. There is no suggestion that H&M has hit problems. Growth must slow simply because of the scale of the present business. But there is still huge growth potential. H&M opened 35 stores in China in 2010/11, but still only has 82. It is not in India and has only just opened its first store in South America. It is in most European countries and is poised ready to expand should circumstances allow. It has only 20 stores in Hungary and eight in Turkey.

Compelling offer
H&M is one of a small group of young fashion retailers that has capitalised on the internationalisation of young fashion. It combines low prices with a responsiveness to changing fashions, quickly getting designs from the catwalk to the stores, although probably not as quickly as Zara.

It is a very compelling offer, and one which has been enhanced by link-ups with leading designers. The first was Karl Lagerfeld in 2004 and the ranges sold out in record time. Others have followed. They are well managed limited editions, which are as much marketing for the chains as commercial ventures in their own right.

The latest is the men’s underwear range with David Beckham, and more must surely follow. The idea is a good one and has not (yet) become stale. The next one is with the French fashion house Maison Martin Margiela. It is to be launched in November 2012, and will be made available in just 230 stores around the world.

Online improving
The online offer is excellent, with the opportunity to “dress” models in any clothes of interest. H&M was slow to launch online outside its home market and still has much catching up to do around the world. But at least it now recognises the importance of an online offer and it is being expanded.

H&M is at the height of its game and still has plenty to go for.

Company background
1947|Erling Persson opens the first Hennes womenswear store in Västerås, Sweden. His goal is to develop a clothing store combining high sales volumes with low prices.| 1964|Entry into Norway.|
1967|Entry into Denmark.|
1968|Hennes buys Stockholm-based hunting and gun store, Mauritz Widforss. Purchase brings in menswear for first time.| 1974|H&M floats on the Stockholm Stock Exchange.|
1976|Entry into UK.|
1980|H&M begins selling through mail-order.|
1980|Entry into Germany.|
1998|H&M launches a transactional website in its domestic market.| 1998|Entry into France.|
2000|Entry into Spain.|
2003|Entry into Italy.|
2004|Karl Lagerfeld for H&M collection.|
2005|One-off collection by Stella McCartney in November. Pre-Christmas jewellery collection by Solange Azagury-Partridge.| 2006|Online sales rolled outside the Nordic countries for the first time (to the Netherlands). First stores in the Middle East. Collaborations with Madonna and Viktor & Rolf.| 2007|First stores in China (Hong Kong and Shanghai).|

|Launch of new store format, COS.|
|Swimwear collection with Kylie Minogue.|
2008|Buys 60% stake in private fashion company FaBric Scandinavien AB, owner of Monki, Weekday and Cheap Monday brands.| 2009|Launched H&M Home in seven European countries via internet and catalogue.| 2010|H&M Home launched in the UK. UK online site goes transactional.| |Announces collaboration with French design house Lanvin to offer...
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