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 around 5,020 stores in 74 countries by the end of 2020. All but around 270 franchised outlets are wholly owned and run by the group. 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 largest territory by outlets (over 580 stores) and the #2 by sales after Germany. The group took its first steps into Asia in 2007 with outlets in China (now its second biggest market by stores and #4 by sales after the UK), and arrived in Latin America for the first time in 2012. Its first store in Central America - in Panama - will open in 2021. H&M's most serious global competitor is the similarly forward-thinking but even more nimble Spanish group Inditex, owner of Zara, 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. Itsapark is a multi-brand concept selling the group's own and some third-party brands, both new and pre-owned items. Net sales reached a new high for the year ending Nov 2019 of SEK 233bn (approx €21.9bn), but fell back in Covid-impacted 2020 to SEK 187bn (approx €18.3bn). Profits have been under pressure for several years, even before Covid. The group appeared to find a solution to these problems during 2019, in which operating margin rose (though only modestly) for the first time in more than a decade. Net profit for that year was approx €1.3bn, but the pandemic slashed that figure to just €122m for ye 2020. Stefan Persson, son of the company's founder, is Sweden's richest man, with a fortune estimated by Forbes magazine at $20bn in 2021. He was group CEO from 1982 to 1998. That role passed to his eldest son Karl-Johan Persson in 2009. In 2020, Karl-Johan took over from his father as chairman, with Helena Helmersson, previously head of operations, becoming CEO. The family controls almost 70% of H&M's voting shares and 36% of equity.
Capsule checked 11th August 2021
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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
Historical profile information for H&M
Adbrands Daily Update 14th Dec 2020: H&M reinforced its commitment to sustainable fashion with the launch of a new subscription-based brand, Singular Society, that aims to sell clothes and home goods at cost, with no markup. It's a bold concept. "Our members get exclusive access to responsibly made products of the highest quality and design from some of the world's best manufacturers – at the price of what they cost to make... Our idea is to help people buy less by enabling them to buy better (which, genuinely, is a sustainability concept we believe in)." Management costs are covered by a modest subscription fee paid either annually or monthly. For a basic subscription price of around €95 a year, members will be able to buy five products a month; or 25 products per month for €195 a year. (Subscribers paying monthly rather than annually pay a slightly higher rate).
Adbrands Daily Update 3rd Dec 2019: "Moments In Between". There's a pleasing lightness of touch to H&M's laidback and chilled Christmas special, out of Adam&Eve DDB. It's a welcome respite from some of the other rather more frenetic seasonal spots, offering a succession of well-observed vignettes of everyday life at this unique time of the year. Presumably H&M is offering other such spots in other markets, because most of the slices of life contained here could only perhaps take place in urban Britain.
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.
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