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Profile of H&M: A Pioneer of Fast Fashion

  • ID: 568624
  • Company Profile
  • October 2007
  • 26 Pages
  • Textiles Intelligence
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H&M is one of the world’s largest and fastest growing clothing retailers. The company is also a pioneer of “fast fashion”: a term used to describe clothing collections which are based on the most recent fashion trends on the catwalk but which are designed and manufactured quickly, are affordable, and are aimed at mainstream consumers. By maintaining efficiency and flexibility throughout its supply chain, H&M is able to respond quickly to changes in fashion trends.

By virtue of its fashion know-how and its adeptness in anticipating trends, H&M has achieved popularity among consumers. This popularity has enabled the company to grow at a formidable rate—despite overcrowding in the clothing market and, at times, sluggish consumer spending.

H&M has a keen understanding of its target market—which is the low price, high fashion end of the clothing sector—and is closely attuned to what mainstream consumers want. It enjoys a strong following among women, particularly those in younger age groups, who make up the majority of its customers. By selling a broad range of fashionable collections which are renewed frequently, by offering attractive prices, and by maintaining a strong presence in prime shopping locations, H&M has ensured that its stores enjoy a steady flow of customers.

Executives at H&M are passionate about their company. They are fastidious about its products and proud of its achievements. They are also sharply focused on its goals and are confident of its ability to achieve them. They are also very ambitious, and constantly challenge the established clothing habits of its consumers. In doing so, they display a great deal of energy and enthusiasm. They attract publicity using bold and striking advertising and by regularly enlisting high profile designers and celebrities to reinforce the company’s brand and image. Also, H&M has built a strong product concept, which has been successfully established in a growing number of countries. H&M’s financial performance over the past five years has been impressive. Sales and earnings have increased robustly, thus enabling the company to pursue growth opportunities and to finance expansion. Growth has also provided the funds for heavy brand promotion. Such promotion has driven sales further, thereby creating a virtuous circle.
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SUMMARY

INTRODUCTION

COMPANY DEVELOPMENT

CORPORATE STRUCTURE AND STRATEGY
Organisation
Management and ownership
Strategy and goals

CORPORATE SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
Social initiatives
Environmental initiatives
Product policy

PRODUCTS
Product overview
Fast fashion
Product design
Brands
Product diversification

PRODUCT SOURCING, LOGISTICS AND DISTRIBUTION
Garment sourcing and suppliers
Quality and safety testing
Purchasing and logistics
Lead times
Distribution channels
Stores
Location of stores
Catalogue and online retailing

SALES AND MARKETING
International expansion
Brand promotion
Innovation
Celebrity endorsements
Collaboration with top fashion designers
Market position

FINANCIAL PERFORMANCE

OUTLOOK

List of tables
Table 1: H&M: sales, 1985/86-2005/06
Table 2: Major players in the fashion industry
Table 3: H&M: key product categories and brands
Table 4: H&M: geographical distribution of sales, 2004/05 and 2005/06
Table 5: H&M: sales by country, 2004/05 and 2005/06
Table 6: Germany: leading clothing retailers by value, 2005
Table 7: H&M: store locations, 2007
Table 8: H&M: key financial data, 2001/02-2005/06
Table 9: H&M: percentage change in monthly sales, 2003/04-2006/07
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- H&M (head office)
- H&M (UK office)
- Barney's
- Macy's
- H&M Rowell's
- Ralph Lauren
- M&S
- Inditex (Zara)
- Gap
- KarstadtQuelle
- Otto-Gruppe
- Metro
- C&A
- Ahlers
- Arcadia
- Benneton
- BHS
- Esprit
- French Connection
- JC Penney
- The Limited
- Matalan
- New Look
- Next
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