H&M, The Fashion Giant
by Joyce Li ~ November 10th, 2011. Filed under: Uncategorized.
H&M is one of the largest chain clothing retailers in the world. With over 1500 stores worldwide and constantly expanding, H&M is at the forefront of fashion, offering chic styles at low prices. They offer a wide range of women’s, men’s, and children’s clothing, ranging from stylish basics to high fashion pieces, and their collections are frequently renewed. Just last year alone (in 2010), they generated a profit of 3.9 billion US dollars. They opened 168 new stores in 2010 and 250 stores in 2011, primarily in the US, Spain, Germany, France, and Canada, and they are looking to expand in emerging markets in Eastern Europe, China, and Japan. The company is entirely self-financed. Within the last five years, sales have increased by 72% and earnings per share by 183%, so H&M can definitely afford this expansion.
H&M has taken some risks that proved to be very successful: having a large volume and many different styles of clothing at affordable costs (whereas many other stores have limited styles and sell them for higher prices). Producing clothes at this volume could lead to disaster if consumers don’t like the styles or the quality, but H&M has sacrificed neither in their mass production, and products continue to fly off their shelves. Their concept of fast fashion has worked out so well.
Besides expanding H&M stores, their ladies footwear range, and online shopping, H&M has also launched a new chain called “Collection of Style” (or COS), which is a more upscale version of H&M, featuring high-fashion pieces at competitive prices, combining practical basics with high fashion straight from the runway. Turnover is very quick and stock is changed every day. They have also collaborated with many high-profile designers to create limited-edition collections offered at affordable prices. They have worked with designers such as Jimmy Choo, Karl Lagerfeld, Madonna, Stella McCartney, Viktor and Rolf, and most recently Versace. All of these collaborations have been extremely successful.