H&M : Hennes & Mauritz (Sweden)

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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 4,400 stores in almost 70 countries. H&M is one of Europe's two leading clothing brands, seemingly immune from the woes than have plagued many other retailers, not least US rival Gap. One key selling point has been 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. The group took its first steps into Asia in 2007 and 2008 with outlets in China 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.

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H&M's main international competitor is Inditex, the parent to Zara and other brands. Others include C&A, Gap and Top Shop. See Clothing & Fashion Accessories Sector for other companies


H&M Hennes & Mauritz
Regeringsgatan 48
106 38 Stockholm
Tel: 46 8 24 55 00

Recent stories from Adbrands Weekly Update:

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.

Adbrands Weekly Update 15th Sep 2017: Ads of the Week "Fall Collection 2017". Adam&Eve DDB has become H&M's go-to agency for ads that require some celebrity wrangling. Most of the retailers' regular ads are still handled in-house, but A&E DDB have proved their mettle for H&M with those "I Beckham" films with David Beckham and Kevin Hart and Wes Anderson's Christmas 2016 camaign. So who better to coax a great bit of work from the notoriously high-maintenance Naomi Campbell? She may get top billing, but the whole supermodel line-up delivers the goods to perfection. 

Adbrands Weekly Update 2nd Feb 2017: H&M reported its first decline in annual profits since 2011 as a result of higher purchasing costs and also, the company said, for markdowns in the final quarter of garments that did not sell as well as planned due to the warm start of the autumn. For the year to Nov 2016, net income slipped 11% to the equivalent of around $2.2bn, despite a 6% increase in net revenues (or 7% in local currencies) to the equivalent of $22.6bn. By the end of last year the company had more than 4,350 stores in 64 countries, and said it has plans for 430 openings during the current period, including debut stores in five new markets: Kazakhstan, Colombia, Iceland, Vietnam and Georgia.

Adbrands Weekly Update 8th Dec 2016: Ads of the Week: "Come Together". Wes Anderson joins the Christmas ads festival with a typically idiosyncratic, mannered-to-the-extreme party piece on behalf of H&M, with assistance from Adam&EveDDB. It's been a pretty extraordinary year for seasonal specials. This one has only the slimmest of tie-ins with the client - presumably those clothes are all from the store - playing instead like some kind of out-take from Grand Budapest Hotel, albeit one in which Adrien Brody's character gives up his evil ways to enjoy a new life as a well-meaning train conductor... Delightfully arch and odd, and thoroughly enjoyable.

Adbrands Weekly Update 4th Feb 2016: H&M made solid progress in 2015, with spectacular performance in some countries (the US, China and Italy), offsetting slower growth elsewhere. However, there was a significant slowdown in the final quarter as a result of the unseasonably mild weather, and those effects are expected to carry over into the current quarter. Net revenues for the year jumped 19% to SEK 180bn (equivalent to €19.3bn or $21.7bn), boosted by the weakening Swedish currency. However the foreign exchange issue also affected profitability, since most of the group's expenses are also in other currencies; so net profit was up only 5% at the equivalent of around €2.3bn. Star performers for the year were the US and China, where sales in Swedish krona soared by more than 40%. Even in local currencies, the increase was impressive at 18% and 16% respectively. The UK and Italy both scored increases of over 20% (8% and 17% in local currency). The group said it will open 425 net new stores in 2016, with the main emphasis on the US and China.

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Already a powerhouse in Europe, H&M took the brave step of attacking the American market and has now found its feet after a shaky start. The company has achieved considerable success by rolling out its highly efficient model into new markets, but is heading towards saturation in its core region of Europe. It also faces stiff competition from arch-rival Inditex, now bigger by total revenues than H&M because of its multi-brand approach. The H&M brand still has a slight edge on the Inditex flagship Zara, and the Swedish group has begun to introduce (or acquire) a number of its own variant brands to broaden its offering.

At least part of the secret behind H&M's success is that it has avoided the temptation to go upscale in price or target market - a terrible mistake from which Gap has still yet to recover. At H&M, styles are firmly in synch with teenagers and young adults. Quality remains high and prices remain low. This is especially the case in the US, where H&M has targeted itself more deliberately towards a female teenage audience than in its slightly more adult-oriented European markets. Globally, H&M's main market is womenswear, with a focus on high quality but affordable fashion for a younger market. In most European markets, there is also a substantial range of menswear and children's clothing. Brands include the core H&M label, LOGG casualwear for men and women, Mama pregnancy clothing, BiB (or Big is Beautiful) larger size designs, and Divided for a teenage market. Jeans range &denim was introduced in 2005. The group offers more expensive tailored menswear under the H&M Men label, as well as standalone lingerie stores under the H&M Beautybox brand. A line of home furnishings, H&M Home, launched in Sweden in 2009 and has gradually been introduced elsewhere. This was followed in early 2014 by a dedicated sportswear line under the banner of H&M Sport. The H&M Beauty range, comprising cosmetics, haircare and skincare products, was rolled out globally in 2015.

The company's most celebrated lines in recent years have been its annual one-off collaborations with leading fashion designers, making top names available to all. In 2004, H&M introduced a limited edition collection by Chanel designer Karl Lagerfeld, priced at the same low prices as the rest of the H&M range. The entire line sold out within just a few hours of arriving in the group's stores. As a result, the guest designer concept became an annual fixture, with Stella McCartney creating a limited edition collection for Autumn 2005, followed by Dutch duo Viktor & Rolf in 2006, and Roberto Cavalli in 2007. Also in 2007, the group introduced an exclusive line of clothing produced in partnership with Madonna. The group's partner for 2008 was Rei Kawakubo of Comme Des Garcons. That collaboration was used with great success as the launch pad for the chain's first outlets in Japan. Kawakubo was followed in 2009 by British designer Matthew Williamson, by Alber Elbaz of Lanvin for 2010, Maison Martin Margiela in 2011 and Marni in 2012. There have also been a number of less extensive partnerships with other designers such as Sonia Rykiel and Jimmy Choo. However one of its most eye-catching partnerships has been an ongoing multi-year relationship with footballer David Beckham, whose range of underwear or bodywear is available exclusively through H&M.

In 2007, H&M also began experimenting with a multibrand strategy similar to that pursued by rival Inditex, opening a more classically styled premium fashion chain under the name Collections of Style, or COS. By Nov 2017 there were 230 outlets in Germany, the UK and around 30 other European markets. So far, however, the success of the new label has been comparatively modest. In 2008, the group acquired majority control of another Swedish fashion company, Fabric Scandinavien, which operates the Weekday and Monki chains as well as clothing brand Cheap Monday, also sold through third party outlets. It took full control of the business in 2010. The most successful of this trio has been Monki, expanded to 120 outlets in 20 countries by Nov 2017. There have been repeated rumours that the group is also considering the launch of a luxury clothing brand, positioned above all of its other labels. It launched the H&M Exclusive Glamour Conscious Collection of higher-priced upscale dresses in 2012, and may expand that line with a fully fledged standalone brand. It launched a new global retail brand in Spring 2013, positioned at a slightly higher price to H&M, called & Other Stories. There were 60 outlets by Nov 2017, in 15 countries. The group's eighth brand launched in London in 2017: another higher-priced fashion and home goods label, Arket. Another brand launched in 2018, Afound, offering a mixture of discounted apparel from other group stores as well as from third parties, along similar lines to TJ Maxx / TK Maxx.

Unlike some other international retailers, H&M owns virtually all its outlets worldwide. Towards the end of 2006, the first two franchised shops were opened in Dubai and Kuwait, and further franchise operations have followed in other Middle Eastern and Asian markets, to a total of under 219 stores. Otherwise all outlets are owned and operated by the group. Total store numbers at the end of Nov 2017 were 4,739 outlets, including 4,288 under the main H&M brand. In mature markets the group has begun to complement full-line stores with niche concept outlets targeting specific segments, for example, teenagers, lingerie or accessories, and more recently H&M Man, which opened its first outlet in Germany in 2004. H&M Home launched in Sweden in 2010 and has been gradually rolled out to more than 40 other countries.

Germany is H&M's biggest market by far, with 463 stores, and gross sales (inc tax) in 2017 of SEK 36.8bn (€3.8bn), almost a third higher than the next biggest market (the US) on fewer outlets. H&M acquired Gap's 10 stores in Germany in 2004 after the US retailer decided to close down its operations there. H&M's most dynamic market in recent years has been the US itself. It opened its first store in New York in 2000 and now has 536 outlets across the country: Almost 70 new stores opened there in 2017 alone, more even than in China. Gross sales were SEK 27.8bn ($3.2bn).

Other important markets are the UK, with 292 stores, and sales of SEK 14.6bn (€1.5bn or £1.3bn); France, where the group has 240 stores with gross sales of SEK 13.7bn (€1.4bn); and now China, with 506 stores and sales of SEK 11.0bn ($1.3bn). Other important markets are its home base in Sweden, followed by Italy, Spain and Netherlands, all with sales over SEK 7.4bn. H&M opened its first store in Latin America in Mexico in 2012, and launched into the Southern hemisphere for the first time in 2013 with an outlet in Chile. The Philippines and Australia joined the portfolio during 2014, followed by South Africa, Peru and India in 2015. New markets for 2016 included New Zealand, Cyprus and Puerto Rico, with Kazakhstan, Colombia, Iceland, Vietnam and Georgia joining the fold in 2017; Uruguay and Ukraine in 2018.

The group runs a catalogue mail order business in Scandinavia, H&M Rowells, which also manages internet orders in that region and, from 2006, in the Netherlands. Online sales were extended to Germany and Austria in 2007, and in the UK and other markets from 2010. They launched in the US in 2012, and had been rolled out to 35 countries by late 2016. A home furnishings collection was introduced in 2009 for mail order and online customers in those countries. All clothing is designed in Stockholm, with production farmed out to more than 800 independent suppliers around the world, primarily in China, Bangladesh and Turkey. There are 20 production offices around the world in Europe, Asia and Africa.

The company is well-known for its firm control of overheads. Lavish executive expenditure is unknown - senior staff shuttling between countries fly economy, taxis are frowned on and few staff even have a company mobile phone. Instead the company spends money where it counts, on logistics and marketing. Although advertising is mostly created in-house, media expenditure is significant. The group also sponsors Swedish show jumping stars Malin Baryard-Johns and Peder Fredericson.


Revenues and store numbers have more than doubled since 2003, yet the group's break-neck expansion has been challenged since 2011 by economic concerns, rising costs and especially currency fluctuations affecting the Swedish Krona. In the year ending November 2011, net revenues edged up by just 1% and net profit fell 15%. Performance for 2012 was better, with net revenues rising 10% and net profit up 7%. But comparable sales for the year to 2013 were flat, and only further expansion prompted the 6% increase to SEK 128.56bn (€14.9bn). Net profit edged up less than 2% to SEK 17.15bn (€2.0bn). 

There was stronger performance in 2014, with net revenues for the period to November up 18% to SEK 151.42bn (R16.7bn). Net profit rose 15% to SEK 20.0bn (€2.2bn). Net revenues to Nov 2015 rose 19% to SEK 180.86bn (€19.3bn or $21.7bn). Net profits were up 5% to SEK 20.90bn (€2.2bn or $2.5bn).

For the year to 2016, the company reported its first decline in annual profits since 2011 as a result of higher purchasing costs and also, the company said, for markdowns in the final quarter of garments that did not sell as well as planned due to the warm start of the autumn. Net income slipped 11% to SEK 18,636bn (€2.0bn or $2.2bn), despite a 6% increase in net revenues (or 7% in local currencies) to to SEK 192,267bn (€20.4bn or $22.6bn).

There were further declines in profitability for year ending 2017. Net sales rose by 4% to SEK 200,004m (€20.8bn or $23.2bn), but net profit slipped by 13% to SEK 16,184m (€1.7bn or $1.9bn), the lowest level for five years. In the final quarter alone, net profit plunged by almost a third and sales slipped by 4% as a result of lower store traffic and heavy discounting.

Once Sweden's biggest company by value, H&M has gradually slipped down the rankings since 2016 as its share price slumps. By Feb 2018 it had fallen to 7th place. It is the #3 by revenues.


Stefan Persson is chairman of H&M, as well as Sweden's richest man, with a fortune estimated by Forbes magazine at $20bn in 2016. He was group CEO from 1982 to 1998. Eldest son Karl-Johan Persson was appointed as CEO in July 2009. The family controls almost 70% of H&M's voting shares and 36% of equity, with combined wealth of around $30bn.

Other senior officers include Jyrki Tervonen (CFO), Kjell-Olof Nilsson (head of business development), Katja Ahola Klamkin (head of global expansion), Patrik Berntsson (head of logistics) and Helena Hermesson (head of production). Kristina Stenwinkel is head of communications. Pernilla Wohlfahrt is head of design & creative director.

Brand heads include Fredrik Olsson (managing director, H&M), Marie Honda (managing director, COS), Samuel Fernstrom (managing director, &Other Stories) and Anders Sjoblom (managing director, H&M Home). Daniel Herrman is global marketing director of H&M. Martino Pessina is head of global sales & operations. Erik Zetterberg is head of global marketing creative.


The group's founder, Erling Persson, was originally a salesman in the family cheese business. But, during a trip to the US, he was greatly impressed by American stores which sold large volumes of clothing at low prices. He set out to replicate that approach in Sweden, opening his first shop in Vasteras, Sweden, in 1947. He called it Hennes, the Swedish word for "hers", because he sold only womenswear, sourced from numerous independent designers and manufacturers in and around Stockholm. Crucially he set out to keep prices as low as possible in order to undercut the country's generally expensive department stores. 

This approach soon proved popular with consumers. During the 1960s the company moved into neighbouring Scandinavian territories Norway (in 1964) and Denmark (1967). In order to expand further in his home country, Persson acquired Mauritz Widforss, a small Stockholm-based business selling sporting apparel and goods for the men's market. In recognition of this development, the group changed its name to Hennes & Mauritz. 

The company went public in 1974, and opened its first store outside Scandinavia in the UK in 1976. But the real expansion began during the 1980s after the appointment of the founder's son, Stefan Persson, as managing director. He recruited the group's first team of inhouse designers (previously all clothing had been sourced externally), acquired Scandinavian mail order company Rowells, and also ramped up expansion into other territories. Between 1989 and 1998, the country opened offices in six new territories, capping this with the launch in Spain and the US in 2000. In general the group has a policy of entering at least one new country each year.

Last full revision 25th April 2017

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