H&M Hennes & Mauritz Ab in Retailing

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Hennes & Mauritz (H&M) AB in Retailing

December 2009

Scope of the Report

Retailing - Hennes & Mauritz

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Scope
• This global company profile covers the following products focusing on the year 2009:

Retailing: US$10,430 billion

Store-based Retailing: US$9,829 billion

Non-Store Retailing: US$601 billion

Clothing & Footwear Specialist Retailers: US$791 billion

Homeshopping: US$190 billion

Internet Retailing: US$243 billion

Disclaimer Much of the information in this briefing is of a statistical nature and, while every attempt has been made to ensure accuracy and reliability, Euromonitor International cannot be held responsible for omissions or errors Figures in tables and analyses are calculated from unrounded data and may not sum. Analyses found in the briefings may not totally reflect the companies’ opinions, reader discretion is advised

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Retailing - Hennes & Mauritz

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Strategic Evaluation Competitive Positioning

Geographic Opportunities
Category Opportunities

Brand and Operational Strategies
Recommendations

3

Strategic Evaluation

Retailing - Hennes & Mauritz

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Key Company Facts
Hennes & Mauritz (H&M) AB
Headquarters Regional Involvement Stockholm, Sweden Asia Pacific, Eastern Europe, North America, Western Europe, Middle East and Africa Clothing and footwear specialist retailers, homeshopping, internet retailing

H&M’s robust performance in battle with Inditex
• The world’s second largest clothing and footwear

Sector Involvement

World clothing and footwear 1.7% (2009) specialist retailers share 1.5% (2008) Retail sales value growth (US$) -4.1% (2009) 17.2% (2008)

specialist retailer in 2009, behind Inditex, and ahead of Gap, H&M continued to record strong sales growth in 2008 and 2009. This was achieved partly thanks to a strong performance in its largest market, Germany, with sales in local currency terms up by double-digits. • Inditex’s and H&M’s battle for the world’s largest clothing and footwear retailer position is closely fought, while Gap, which was the world’s largest player in this channel until 2007, has been significantly left behind by the leading two.

Hennes & Mauritz (H&M) AB - Sales excl. VAT vs Profit After Tax 90,000 SEK million 80,000 70,000 60,000 50,000 40,000 30,000 2004 2005 2006 2007 2008 Sales excl VAT Profit after tax 18,000 14,000 12,000 10,000 8,000 6,000 SEK million 16,000

H&M’s profits remain healthy
• H&M registered sales excluding VAT of SEK88.5

billion (US$13.7 billion) in 2008, an increase of 13% over the year, with profit after tax also up 13% to SEK15.3 billion (US$2.4 billion), which highlights the group’s high margin. • Its major rival, Inditex, recorded revenue of EUR10.4 billion (US$14.5 billion) in 2008, up 10% on the previous year, with net profit up 0.2% to EUR1.3 billion (US$1.8 billion). Gap registered sales of US$14.5 billion, down 8% in the year, as it suffered from poor conditions in its core US market, though the company’s net profit grew by 16% to US$967 million, helped by cost savings. 4

Strategic Evaluation

Retailing - Hennes & Mauritz

© Euromonitor International

Q3 results: Resilient Performance, Continued Expansion
Hennes & Mauritz (H&M) AB – Q1 to Q3
Sales excluding VAT (SEK billion) Profit after tax (SEK billion) Net margin (%) 73.4 (2009) 62.2 (2008) 10.2 (2009) 10.2 (2008) 13.9 (2009) 16.4 (2008) Resilient performance, with sales driven by store network...
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