Growth strategies of H&M

1. The case of

2. GROUP’S MEMBER

3. CONTENT
• H&M overview
•

4. H&M OVERVIEW

5. • H & M Hennes & Mauritz AB (H&M) is a Swedish known for
its fast-fashion clothing for men, women, teenagers and
children.
• H&M also sells own-brand cosmetics, accessories, footwear and
a textile interiors concept.
• H&M exists in 61 countries with over 3,700 stores and as of 2015
employed around 132,000 people
ABOUT H&M

7. • Operations are
run in a way
that is
economically,
socially and
environmentally
sustainable
• Purpose is to offer
their customers
fashion and quality
at the best price.
• Commitment to
integrating social
and environmental
concerns

8. CHARACTERISTICS
A major multinational clothes and
Ncosmetics retailer
Fast fashion at low prices
Business concept: Fashion and
quality at the best price
Multitude of designers and suppliers

9. VERTICAL INTEGRATION
STRATEGY

10. VERTICAL INTEGRATION
2005 2006 2007 2008 2009 2010 2011 2012 2014 2014
Total number of stores 1,193 1,345 1,522 1,738 1,988 2,206 2,472 2,776 3,132 3,511
Sales excluding VAT, SEK m 61,262 68,400 78,346 88,532 101,393 108,483 109,999 120,799 128,562 151,419
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2013

11. H&M Current Strategy
Europe:
 Focus Market: UK
– 253 Stores, SEK 44.2m/Store
 81% Stores, 83.5% Total Revenue
 Dependency On Germany 22.9%
Total Revenue
 Internet Retailing – 8 Countries
Middle East:
 Franchise arrangements
United States:
 Focus Market
 356 Stores
 SEK 46.1m/Store
China:
 Focus Market
 291 Stores
 SEK27.55m/Store
South East Asia:
 Beside the Philippines –
H&M’s latest market –
there are stores in
Singapore, Malaysia,
Thailand and Indonesia
Globally
 10% - 15% New Stores Annually
 90% High Income Profile Countries

12. %Global
Share
Expansion Strategy
H&M 1.6% • Global expansion equally in well developed market and emerging
markets, provided that they are stable and free market
• Focus on US, UK and China as major growth market
Zara
(Inditex)
1.4% • Asia has been set as the top priority for expansion
• Traditional markets in Europe and the U.S. have become more
saturated
Uniqlo 0.7% • Focus on Asian expansion– China, HK, South Korea
• Focus on maintaining presence in Taiwan, UK, USA and Paris
The Gap 1.4% • Franchise stores in top 10 apparel markets globally
• Enter China and Western Europe
Benetton 0.2% • 80% concentration in Europe
• Focus on India, China and Mexico
Sources: Team JEDI analysis, Just-Style.com, company annual reports

13. HORIZONTAL
INTEGRATION STRATEGY

14. • H&M: price-conscious, fast, disposable fashion.
• Luxury brand: quality above quantity, service level, rarity
and the price level which makes it unattainable for the
masses to purchase.
A short-term product line is fulfill customers’ dream,
exclusivity could be offered to an affordable price.
COLLABORATION STRATEGY

15. • Since 2004 H&M has been in the fore-front of
designer collaborations
• More than 20 designers and style icons
• Received positive critique and attract a huge
number of fans
The launching of Matthew
Williamson Collection, 2009,
Hamngatan, Stockholm, Sweden.
Balmain X H&M Collection
Launch, H&M Champs Elysees,
Paris, France
COLLABORATION STRATEGY

16. COLLABORATION WITH KARL LAGERFELD
• First collaboration of
H&M
• 24% increase in
organic monthly sales
compared with
previous year
• Gained popularity and
brand’s equity

17. Characteristics for success:
• Both brands’ awareness was
higher
• Moderate quality awareness
• Higher perceived equity of H&M’s
brand
• Innovative product
• Win-win situation
COLLABORATION WITH KARL LAGERFELD

18. COLLABORATION WITH JIMMY CHOO

19. Online products sold
out within an hour.
Pieces have already
cropped up on eBay,
where some are priced
at twice their retail
value.
COLLABORATION WITH BALMAIN

20. NEW BRAND STRATEGY

21. Place your screenshot here
COS
– Higher price
segment
– 2007, 11 COS
stores in some
of Europe’s top
metropolitan
cities
– 2014, 114 stores
in 25 countries

22. □ WEEKDAY, MONKI
and CHEAP MONDA
■In 2010, the number of
stores from 20 to 66, with
Weekday and Monki shops
in seven countries
■These stores represent
only about 5 percent of
total stores

23. RELATED
DIVERSIFICATION

24. BROADENING PRODUCT RANGE
LADIES MEN KIDS
DIVIDED &DENIM
2004
2009
2014
2015
H&M HOME
SPORT
COSMETICS

25. & OTHER STORIES
• Launched in 2013
• A wide range of
shoes, accessories
and cosmetic
• 2014, 17 stores in 10
countries
• To overcome the challenge of the new brand, H&M group
make a huge investment in marketing
 Fashion show in Paris
 Started dressing celebrities like Helen Hunt at the Oscars
 Beyoncé- the new face of the campaign

26. CONCLUSION