History of H&M

9 September 2016

Mauritz AB (H&M) is a Swedish multinational retail-clothing company, known for its fast-fashion clothing for men, women, teenagers and children. H&M exists in 43 countries and as of 2011 employed around 94,000 people. [2] The first store was opened on the high street of Vasteras, Sweden in 1947. [3] It had 2,325 stores at end of 2011 and 2,629 stores at end of August 2012. [4] It is ranked the second largest global clothing retailer, just behind Spain-based Inditex (parent company of ZARA), and leads over third largest global clothing retailer, United States based GAP Inc.

The design team in the company’s Sweden office controls the steps of production, from merchandise planning to establishing specifications, and production is outsourced to approximately 800 factories in Europe and Asia. These facilities are used for horizontal division of labor, rather than being integrated Locations [edit] Asia [edit] The Middle East [edit] H&M store in the Ginza district in Tokyo, Japan The company opened its first Asian store (also the company’s first franchise) in Dubai, United Arab Emirates, in 2006.

History of H&M Essay Example

It followed with a store in the Salmiya district of Kuwait City, Kuwait. In 2008, it opened its doors in Bahrain, Egypt, Jordan, Lebanon, Morocco, Oman, Qatar, and Saudi arabia. China [edit] It expanded into East Asia in March 2007, with its first store opening in the city of Hong Kong on 10 March 2007. Australian pop singer Kylie Minogue opened that store where she also exclusively launched her range of swimwear, “H&M loves Kylie”. The first location in the city of Shanghai was opened in 2007. [citation needed] There are a total of 114 stores in China. (2012) Japan [edit]

The first Japanese store was opened in Ginza on 13 September 2008, while a second store was opened in Harajuku in November 2008. Another store was opened in the Shibuya shopping district on 19 September 2009. [6] South Korea [edit] On 25 February 2009, the company announced that it had signed an agreement to open its first store in South Korea, located in the Myeongdong district of Seoul, and that it was scheduled to open during Spring 2010. [7] Israel [edit] The first Israeli store opened in Tel Aviv in 2010, followed by five more stores across the country,[8] including a branch at the Malha Mall in Jerusalem.

H&M’s steady growth–which has seen its sales double in the four years between 1994 and 1998–can be expected to continue, with new store openings averaging some 60 per year. The company has only just begun to tap its growth potential. In Germany, the company represents less than two percent of the total retail clothing market; H&M remains similarly limited in England, where the company’s market share is less than 0. 5 percent. H&M’s expansion has barely touched such major clothing markets as France, Italy, and Spain.

The company has been moving to fill out its southern European map, however. In 1998 the company entered France with six stores in Paris. Spain was added to the list in 1999, with the proposed opening of three stores. H&M is also making its first forays into the United States, a market already somewhat crowded with retailers marketing a similar concept–fashionable, low-priced, quality clothing targeted especially at 25- to 35-year-olds but extended also to include children and mature shoppers. Plans to open the company’s first U.S. stores were announced in April 1999. In Europe, the company’s chief competition remains the Spain-based Zara chain, the U. S. -based Gap chain, and, to a more limited extent, Italy’s Benetton. H&M operates under the strategy of “Fashion and quality at the best price. ” H&M stores are closely guided from the company’s Stockholm headquarters to achieve a uniform concept–it is said that a sweater featured in a window display in London will be featured in exactly the same way in Reykjavik and all other H&M stores.

Such control over its image has enabled H&M to build a consistent brand appeal throughout the wholly company-owned chain. H&M’s low-debt, cash-rich position enables it to respond quickly to developing trends. New clothing products are introduced on a near-daily basis–breaking the traditional seasonal stock rotation found in the retail clothing industry. Clothing items rarely remain on H&M’s shelves for more than a month; this rotation encourages repeat shopping. H&M also controls the fashions featured in its stores: almost all of its clothing sales fall under the company’s own range of brand designs.

The company employs a staff of more than 50 designers, who create the designs for such H&M brands as Hennes (which means “hers” in Swedish), Woman Collection, and LOGG, for women; Uptown; LOGG, and Contemporary for men; Rocky, Rocky Girl, and Impuls for teenagers; and Baby Baby, LOGG, Rocky, and C-Dept for children. The company also sells cosmetics under the H&M Cosmetics, FOB (Face of Beauty), ResQ, Steele, Magnum, and Basic Spa brand names. H&M does not manufacture its own clothing but instead works with some 1,600 suppliers, principally in Europe and Asia, under strict quality and other human resource standards.

H&M continues to be majority controlled by the founding Persson family, who own some 70 percent of the company’s stock. In 1998, however, chief architect of the company’s expansion Stefan Persson was named the company’s executive chairman. In his stead as managing director, the company has placed Fabian Mansson, former buying director. Forming a Fashion Empire in the 1940s H&M was founded as Hennes in 1947 by Erling Persson. A former salesman and founder of another company, Pennspecialisten, in Vasteras, Sweden, Persson had discovered a new retail clothing store concept during a trip to the United States.

Persson decided to import this retail concept–that of high turnover produced by low prices&mdasho Sweden. From the first Hennes store, which featured exclusively women’s clothing, opened in Vasteras, Hennes expanded throughout Sweden, covering much of the country through the 1960s. Hennes also began to export its low-price clothing concept, beginning with neighbor Norway in 1964, and joined by Denmark in 1967. By the end of the 1960s, Hennes looked to extend its range beyond women’s clothing. The company also sought further expansion in Stockholm.

These two goals were fulfilled with the purchase, in 1968, of Mauritz Widforss, a hunting and gun shop on Stockholm’s Sergelgatan. As part of the purchase, Hennes also received a large stock of men’s&mdash? imarily sportswear–clothing items. These were quickly added to the company’s retail offering; the company’s name was changed to Hennes & Mauritz to reflect its expanded product range. At the same time, Hennes & Mauritz added a line of children’s clothing to its stores, so that, by 1970, the company offered clothing for much of the family (two more segments, teenagers and babies, were added in 1976 and 1978, respectively).

The Mauritz addition did more than add its name and expand the company’s clothing range. It helped transform the company’s product offering itself. The introduction of sportswear led the company to develop clothing that better reflected the spirit of the times, as a new generation of youth clamored for clothing that allowed them to express their individuality. H&M began to develop the casual, down-to-earth yet fashionable image that proved a success in its later expansion. Seeking further growth, the company made a new acquisition in 1973, buying up fellow Swedish company Bekladnadskompaniet.

In the next year, as H&M prepared further foreign growth, the company went public with a listing on the Stockholm stock exchange. The Persson family, however, retained the largest share of the company stock, leaving control securely in the family’s hands. During the 1970s, H&M began to look beyond its Scandinavian base. In 1976 the company entered the British market&mdasho mixed results. While H&M’s British growth long remained limited, reaching just 25 in the late 1990s, the company posted better results on the European continent. At home, the company acquired the Rowells mail-order company, which became the base for H&M Rowells, the company’s mail-order subsidiary. The next move for H&M was to Switzerland, where the company’s stores quickly became a mainstay in that country’s major cities. Switzerland became one of H&M’s principal foreign markets. In 1980 H&M launched its first German store. The H&M concept somewhat revolutionized the German clothing retail market, which was described as having remained rather stodgy.

H&M’s informality also raised some ripples in Germany, as employees were more than encouraged to drop the formal “Sie” form in their conversations with other employees. Nevertheless, the H&M concept caught on well with the German consumer at a time when few other retail brands existed on the German retail scene. “Global Fashion” for the 1990s A new generation took the lead of H&M when Erling Persson turned over the company’s managing director position to his son Stefan Persson. Under the younger Persson, H&M continued its international expansion, while retaining tight control of the H&M image.

H&M continued to expand its presence in its existing markets throughout the 1980s, steadily opening new stores. By the 1990s, H&M would grow to become one of the largest retailers in Sweden and that country’s fifth largest company. In the late 1980s, H&M attempted to diversify its brand line by opening the Galne Gunnar (Crazy Gunnar) chain of cut-price stores. After expanding the chain to 18 stores in Sweden, the company decided to abandon the concept after ten years, redeveloping the existing Galne Gunnar stores as H&M stores. Sticking with the H&M name appeared to be the most profitable future for the company.

Growth of the H&M chain, particularly in foreign expansion, stepped up dramatically in the 1990s. The time was ripe for what Stefan Persson described as “global fashion. ” Persson had been quick to recognize the emergence of fashions and trends–born of MTV, Hollywood, Madison Avenue advertising, and the Internet–that transcended national borders to become fads among youth and other age groups across the world. H&M, with its emphasis on uniformity among its stores, was well-positioned to appeal to this new generation of consumers. As a nod perhaps to the times, the company also created a new line of clothes, under the BiB (Big is Beautiful) brand name. The company’s international expansion stepped up in earnest. After opening in the Netherlands in 1989, the company moved into Belgium (1992), Austria (1994), and Luxembourg (1996). By 1994, the company’s sales had topped SKr 13. 5 billion; more than 70 percent of sales came from beyond Sweden. That same year the company’s German stores overtook Sweden to become H&M’s largest single market. By the end of the decade, Germany would represent more than double the company’s Swedish sales–despite H&M’s barely two percent of the German market.

International expansion continued in the second half of the 1990s, as the company opened some 60 or more stores per year. Finland was the next market to be tapped, in 1997; the following year, France became the company’s new frontier. In 1998 six H&M stores appeared in France, primarily in Paris and surrounding areas. Some analysts wondered whether H&M’s low-priced fashion concept would appeal to the more snobbish French clothing shopper, and questioned whether the company’s success among Northern European countries would translate to the southern European markets.

Indeed, H&M had remained notably absent from Italy and Spain, two of the most important European retail clothing markets–perhaps the company had sought to avoid head-to-head battles with similar concept brands Zara, of Spain, and Benetton, of Italy. Nonetheless, in April 1999, the company announced its intention to enter the Spanish market by the end of the year, with two or three as a start. At the same time, the company announced its intention to reinvigorate its struggling British operation, with calls for opening a large number of new stores and to update a number of its existing locations.

Throughout its history, H&M had remained entirely in its European base. In 1999, however, the company judged the time auspicious for a U. S. entry, with the first stores expected to open in early 2000. It remained to be seen if the company could successfully re-import the formula of low-priced, quality fashions that had provided the inspiration for its own beginnings more than 50 years before. Seven commitments H&M has defined seven ambitious commitments on sustainability which we work hard every day to achieve. 1 – Provide fashion for conscious customers Our business idea is to offer fashion and quality at the best price.

To us, ‘quality’ includes that our products should be produced, transported and sold with care for people and the environment. Our customers are at the core of everything we do and our success depends on our ability to deliver what they want. 2 – Choose and reward responsible partners H&M does not own any of the factories that manufacture our products. Instead, production takes place at around 1,800 factories that are owned or subcontracted by almost 800 suppliers. 3 – Be ethical Our ethical approach is firmly rooted in our corporate values. We take a clear stand against all forms of corruption and regard our diversity as an asset.

Our employees are key to our success and it’s vital for us to retain our committed and talented colleagues, and as we grow to attract even more such people. As a result, we want to ensure that we are a fair partner to them as well as to our suppliers. As a minimum, we comply with all relevant laws and regulations and, beyond that, we aim to act ethically in everything we do. 4 – Be climate smart Climate change is one of the major challenges of our time. Like many other organisations, we have a keen interest in tackling this – and a responsibility to do so.

And as for many businesses, energy use and transport are unavoidable. We do, however, work hard to be as energy efficient as possible. And for the energy use we cannot avoid, we ultimately strive to use renewable energy only. Our goal is to reduce our operations’ total emissions by 2015 – despite our continued growth of 10 to 15 percent new stores each year. 5 – Reduce, reuse, recycle Making the most of the resources we use and avoiding waste is central to our business idea. Avoiding unnecessary material use and applying smart methods to reuse and recycle helps reduce waste.

But it also helps to decrease the need for virgin resources. Both mean fewer environmental impacts – and it can save money, too. 6 – Use natural resources responsibly From using cotton to transporting finished garments and lighting our stores, H&M is a consumer of natural resources. We depend on them throughout our value chain to do business and meet the needs of our customers. However, increasing scarcity of some resources globally, like oil and minerals, and regionally, like water or agricultural land, means that access to these vital inputs for our business cannot be taken for granted.

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