You may not immediately think of Sweden as a country famous for its fashion, but its H&M chainstore has successfully conquered the globe, now with more than 4,900 stores in 71 countries by the end of 2018. All but around 250 are wholly owned and run. H&M is one of Europe's two leading clothing brands, until recently seemingly immune from the woes than have plagued many other retailers, not least US rival Gap. For several years, a key selling point was H&M's annual collaboration with different star designers. Among the many luminaries who have already loaned their names to the chain are Madonna, Karl Lagerfeld and Stella McCartney. Although Europe is the group's stronghold, H&M is one of the few foreign fashion retailers to have established a successful foothold in the US market, now its second-largest territory by sales with 560 stores. The group took its first steps into Asia in 2007 and 2008 with outlets in China (now its third biggest market by stores) and Japan, and arrived in Latin America for the first time in 2012. H&M's most serious global competitor is the similarly forward-thinking but even more nimble Spanish group Inditex, and it has followed that group's lead in recent years by rolling out several satellite brands to support the main H&M chain. These include COS, Monki, Arket, & Other Stories and Weekday. Net sales reached a new high for the year ending Nov 2018 of SEK 210bn (or approx €20.4bn) but profits have come under intense pressure, falling by 22% to approx €1.2bn. Stefan Persson is chairman of H&M, as well as Sweden's richest man, with a fortune estimated by Forbes magazine at $16bn in 2019. He was group CEO from 1982 to 1998. Eldest son Karl-Johan Persson was appointed as CEO in 2009. The family controls almost 70% of H&M's voting shares and 36% of equity.
Capsule checked 22nd January 2019
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Who are the competitors of H&M? H&M's main international competitor is Inditex, the parent to Zara and other brands. Others include C&A, Gap, Top Shop, Benetton and Uniqlo. See Clothing & Fashion Accessories Sector for other companies
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Historical profile information for H&M
Adbrands Weekly Update 29th Nov 2018: H&M is to shutter its secondary brand Cheap Monday, citing "major challenges" in the fashion industry and "extensive change as a result of ongoing digitalisation". The Cheap Monday brand specialises in skinny jeans and related apparel, and is sold primarily through third-party retailers, though it also has a small collection of its own outlets. All these as well as the brand's online store will be closed with the loss of around 80 staff.
Adbrands Social Media 14th Nov 2018: "Hotel Mauritz Ep 1". H&M's Christmas campaign, from Adam & Eve DDB, will encompass six 30-second spots set in the fictional Hotel Mauritz. (Fun fact: H&M stands for Hennes & Mauritz; Hennes - "Hers" in Swedish was the original womenswear business, which acquired Mauritz Widforss menswear in the late 1960s). Here's the first of the series, featuring the quirky and always watchable American actress Aubrey Plaza. It's fine, but not really up to some of this retailer's (or its agency's) past hits. It remains to be seen how the series plays out. A new episode will drop each week until Christmas.
Adbrands Weekly Update 29th Mar 2018: The downturn at H&M has been swift and is becoming increasingly brutal. Results for the group's 1Q ending Feb showed a 44% plunge in profits as a result of heavy discounting. Sales were down a little under 2%. H&M's problems only really began at the end of the summer as sales began to slow, prompting the first decline in revenues for two decades in the quarter to Nov. But the group kept producing garments at the same rate, with the result that it is now sitting on a mammoth overstock of unsold inventory, now worth some $4.3bn and still rising. It is trying to clear this excess, mainly online, but with only limited success. Analysts were generally alarmed by the results, voicing fears that the constant promotional discounting could tarnish the brand.
Adbrands Weekly Update 22nd Mar 2018: Ads of the Week: "Spring Collection". The career resurrection of Winona Ryder gathers pace with a charming cameo in H&M's new campaign for Spring, from Adam&Eve DDB. Her appearance is the cherry on top of what is already a fabulously energising film, starring Elizabeth Olsen, and also featuring singer/songwriter Andrea Valle and supermodels Andreea Diaconu, Anna Ewers, Imaan Hammam and Naomi Shimada. Girl power indeed. And shot in the heartland of tango on the street of Buenos Aires. Our particular favourite touch is that brilliant use - or rather ab-use - of the letterbox format. Great effect. Get up and dance!
Adbrands Weekly Update 21st Dec 2017: Shares in H&M plunged by more than 15% to their lowest level since 2009 after a grim final quarter for the latest financial year ended in November. H&M's stock price was already down by more than 40% from its early 2015 highs. Like many traditional retailers, it is struggling to adapt to the increasingly rapid shift towards online shopping. Though full results won't be available until the end of January, H&M disclosed that net sales for the last quarter fell 4% year-on-year, "significantly below the company's own expectations". That may not sound like a big decline, but it represents H&M's worst quarterly performance since 2001, offsetting stronger performance earlier in the year, and reducing the full-year increase to around 4% in Swedish Krona to the equivalent of €24.0bn. The company is already taking steps to raise its online profile further. Though it already runs its own extensive e-commerce operation, it has also widened its collaboration with Chinese super e-tailer Alibaba's Tmall portal to include the core H&M brand as well as satellite label Monki. H&M will also further integrate its physical and digital stores, and will optimise its bricks and mortar network to weed out poorer performing outlets.
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