H&M

About me:
H&M in brief
H&M was established in Västerås, Sweden in 1947 by Erling Persson. We now sell clothes and cosmetics in over 1,200 stores around the world. Here are some brief facts about H&M:
-H&M was established in Sweden in 1947
-Today H&M sells clothes and cosmetics in more than 1,300 stores in 24 countries
-The business concept is "Fashion and quality at the best price"
-H&M has approximately 100 designers who work with a team made up of 60 pattern designers, around 100 buyers and a number of budget controllers to create H&M's clothing collections for women, men, children and teenagers
-H&M also sells cosmetics under its own brand
-New goods are delivered to our stores every day
-H&M also sells fashion via catalogues and the Internet. Customers can purchase from H&M Shop online in Sweden, Denmark, Finland, Norway and the Netherlands
-H&M does not have any factories of its own, but instead works with around 700 independent suppliers in primarily Asia and Europe
-H&M has around 20 production offices around the world
-The group has more than 60,000 employees
-The turnover in 2006 was SEK 80,081 million
The world's first H&M store on Stora Gatan in Västerås, Sweden.
Our philosophy
Our business concept is to give the customer unbeatable value by offering fashion and quality at the best price. To be sure we can offer the latest fashions we have a design and buying department that creates our clothing collections.
We ensure the best price by:
-having few middlemen
-buying large volumes
-having extensive experience of the clothing industry
-having a great knowledge of which goods should be bought from which markets
-having efficient distribution systems
-being cost-conscious at every stage
We put a lot of energy into ensuring and improving the quality of the goods. We also have the resources to carry out thorough tests and regular quality controls. In addition to good quality products, our quality concept also requires the garments to be manufactured without the use of environmentally hazardous chemicals or harmful substances and to be produced under good working conditions.
The customer should always get a good deal
At H&M, everyone is working towards the same goal - giving the customer unbeatable value through the combination of fashion, quality and price. We have a wide range and new goods are delivered to our stores every day. To make things clearer for our customers we have divided up the range into a number of different concepts. We offer fashion basics as well as clothes with a high fashion content within each collection, so that customers can easily combine different garments and find their own personal style. This allows customers to choose from a wide range - from updated classics to the height of the latest trends.
Our stores are designed to allow customers to choose on their own. The aim is to create a comfortable and inspiring atmosphere in the store that makes it simple for customers to find what they want and to feel at home. It is important to provide customers with ideas and inspiration so that they can choose what suits their own style. We do this is through our garment displays and mannequins which provide inspiration for matching and styling ideas.
Convenient shopping by mail order and on the Internet
Since 1980 H&M has offered its customers an alternative and convenient way to shop by mail order and on the Internet. Here again the business concept is to provide fashion and quality at the best price. Customers can shop in this way in Sweden, Norway, Finland, Denmark and the Netherlands. Two big catalogues come out each year – a Spring catalogue and an Autumn catalogue. These catalogues are supplemented by a number of smaller seasonal catalogues with a particular orientation. Many customers choose to shop at our Internet outlet, H&M Shop online.
Online sales became available in 1998 when it was set up on a trial basis in Sweden and then expanded over the next few years to the rest of the Nordic countries. A considerable expansion of online and catalogue sales is being prepared to complement the stores in the existing markets. The Netherlands will be the first country outside the Nordic region to start online sales in autumn 2006. We see the Internet as one of several distribution channels, but we anticipate that the main part of our sales will continue to take place in our storesOnline sales started in 1998 on a trial basis in Sweden and were then extended over the next few years to the rest of Scandinavia. A considerable expansion of mail order and online sales is being prepared to complement the stores in the existing markets. The Netherlands will be the first country outside the Nordic region to start online sales in autumn 2006. We regard the Internet as one of several distribution channels, but we anticipate that the majority of our sales will continue to take place in our stores in the future also.
Our concepts
H&M offers a wide range of fashion using many different concepts - from updated classics and basics to clothes that reflect the very latest international trends. In addition, we sell underwear, sportswear, accessories and cosmetics. In simple terms, fashion for everyone - and always at the best price.
Women
The women’s wear department has a coordinated range of fashions for fashion-conscious women of all ages. The main collection is divided into tailored classics and a section containing current fashion garments. In the big cities, we also offer garments with a high fashion content for women who want to keep up with the very latest international trends.
Women’s wear also includes the &denim jeans collection, L.O.G.G. with updated classic casuals, L.O.G.G. Sport for the active lifestyle, Mama for women who still want to be fashionable during their pregnancy and BiB in plus sizes. During the spring we offer an extensive swimwear collection.
Each concept in the women’s wear department has a broad range of accessories that match both the main collection and the smaller concepts. There are also matching socks, underwear and sleepwear – everything from basic items to more exclusive sets.
Men
Our men’s wear department has a broad range to cover different tastes and needs as regards fashion content, function and price. The main collection contains everything from classic tailored and knitwear items to seasonal fashion garments and clothes that reflect the very latest trends. In selected stores we offer a high quality tailored collection consisting mainly of suits with matching shirts, ties and knitwear.
Men’s wear also includes L.O.G.G. with updated classic casuals, L.O.G.G. Sport for the active lifestyle, the &denim jeans collection and an extensive swimwear collection during the spring season. There are also matching accessories for every concept, as well as socks, underwear and sleepwear items.
Kids
The children’s range is divided into the different concepts for baby, children and H&M Young up to 14 years. The children’s garments and accessories are as fashionable as they are practical, hard-wearing, safe, comfortable and functional. The children’s garments go through thorough tests to guarantee the highest safety and quality.
The baby wear collection consists of clothes for the youngest ones (0–18 months). With a focus on fashion, function and safety, the seasonal trends are expressed in a playful way.
The children’s wear collection for girls and boys aged 18 months to 8 years combines fashion, colour, graphics and design with comfort and functionality. The clothes should be as attractive as they are practical and hard-wearing.
H&M Young is a collection for 9–14 year-olds who often look to older teens for their fashion inspiration and who are more fashion conscious than younger children. H&M Young will be launched in stores during spring 2006. The collection offers seasonal garments that are functional, comfortable and safe.
L.O.G.G., which offers timeless leisure fashions, complements the range in all sizes at the children’s department and includes socks, underwear, sleepwear, matching accessories and swimwear.
Divided – young trend
Our teenage department is called Divided and offers fashion with a young look for guys and girls.
Divided offers fashion with a young look. The range consists of denim and street wear garments for boys and girls for all occasions – from everyday clothes to partywear. The extensive range, which also includes &denim and accessories, reflects the very latest international trends.
Cosmetics
H&M’s cosmetic department offers an extensive range of make-up and body care products with matching accessories such as brushes and make-up bags. The range of products is seasonal and is constantly being renewed with new colours, perfumes and products that reflect H&M’s fashion trends.
The products are not tested on animals, neither during the production process nor in the finished state. All suppliers sign an assurance that the content, packaging and labelling meet EU quality and safety requirements.
From idea to store
H&M’s Design and Purchasing department plans the major trends up to a year in advance. The process begins with monitoring and analysis of events, the media and the world around us so that we can form an overall picture of future trends and customer requirements. Sources of inspiration include exhibitions, different cultures, newspapers and magazines, travel, street fashion, fashion history and various trade fairs.
H&M's method of producing the products demanded by customers can be illustrated by a triangular diagram. The triangle symbolises the breadth of the range, from updated classics and fashion basics which are sold in large quantities to the very trendiest of clothes that sell in smaller volumes primarily in city stores.
Design and buying
In H&M’s design and buying department the big trends are planned up to a year in advance. It starts with observing and analysing the world around us in order to obtain an overall picture of future trends and customer requirements. Inspiration is drawn from exhibitions, different cultures, magazines, travels, street fashion, fashion history, various trade fairs and other sources.
Once various impressions have been documented, the actual design work starts. H&M has more than 100 in-house designers working on creating the various collections. The themes, colours, fabrics, silhouettes and even certain garment types start to emerge, which is a feel that will permeate the new season’s fashion.
Collections created with the customer in focus
The design and buying department in Stockholm is where H&M’s collections are created. Its task is to find a good balance between the three components that make up H&M’s business concept – fashion, quality and the best price – for every target group. Over 500 people work together to create H&M’s collections for women, men, teenagers and children. To meet the needs of customers of all ages, each with their own particular style, we offer many different concepts. The most important factor in H&M’s success is that customers appreciate our collections. This means that we are constantly asking ourselves who the customers are, what their style is and what they are looking for.
One team for each concept
Each concept has its own team of designers, buyers, assistants, pattern makers and controllers as well as a section manager, all of whom work together. Each team tries to produce the right mix of garments for its concept. The number of people on the team varies depending on the concept. More designers, buyers and pattern makers may work on the larger concepts, e.g. in women’s wear, while concepts such as those for teenagers have smaller teams. Each member of the team has specific skills that are required for creating the collection. They are united by their common interest in fashion and trends and by their understanding of what customers want.
Mix of basics, current fashion and trend garments
seasons and customer analyses help to determine the trends that we must focus on for forthcoming seasons. The merchandisers in each sales country also provide information on running price development, sales patterns and how sales are developing.
Some trends are planned up to a year in advance as regards colours, materials and styles, while the very latest trends are picked up at much shorter notice. They are influenced by inspirational trips all over the world, street trends, exhibitions, films, magazines and various trade fairs at which textiles, design and colour are studied.
H&M’s fashion year consists of two main seasons: Spring/Summer and Autumn/Winter. Buying is continually adapted to the prevailing market conditions and based on signals from our stores concerning what is selling well. To optimise fashion precision, goods are bought in on an ongoing basis during the year. Buying varies with the country and climate.
The right lead time for each item
We are constantly refining our management tools to make the flow of goods more efficient. Lead times vary from two to three weeks up to six months. The different lead times reflect differences in the nature of the goods. It is important to know the right time to order each item. A short lead time is not always best, since the right lead time is a matter of getting the right balance between price, time and quality.
For high-volume fashion basics and children’s wear it is clearly advantageous to be able to place orders far in advance. Trendier garments in smaller volumes require considerably shorter lead times. We need to be able to get supplementary orders out into the stores within just a few weeks. We aim to cut lead times further by developing our advanced planning. The later an order can be placed, the better becomes the precision and the greater the flexibility – allowing stores to be restocked quickly with the best-selling goods.
Fast and efficient logistics flows
Logistics is an extremely important matter for H&M. Fast, efficient flows are crucial – both when it comes to supplying goods from a production unit to the store and for the stores’ feedback of sales information to the buying department. Getting the right goods in the right quantity to the right store in the right country at the right time requires a well-functioning distribution system. H&M acts both as importer and retailer, and thus has full control over each link in the chain. Another important factor is the IT support that is constantly being developed and which is one of the cornerstones of H&M’s logistics.
When the goods arrive at the respective distribution centre they are checked before being delivered to the stores and to the stores’ local stock warehouses. The stores’ shelves are then restocked according to how well each item is selling. New items come into the stores every day, so that customers can always find something new and exciting.
Always the best location
Best business location has been a firm principle of H&M since 1947 and is no less important today. H&M does not own any stores but instead leases store premises. In this way we do not tie up capital and we can freely pursue our business concept.
The H&M store is now a well-established presence in most prominent shopping streets with considerable customer flows around Europe and in North America. In London, for example, we are located on Oxford Street, in Paris on Boulevard Haussman, in Milan on Corso Vittorio Emanuele, in New York on Fifth Avenue and in San Francisco on Powell Street.
Before establishing stores in a new market we conduct a thorough analysis of such things as demographics, employment, purchasing power and purchasing behaviour. We also carry out a local survey of the shopping areas and shopping centres. We document their size, which other stores are there and where our competitors’ stores are located. Other important factors are traffic flows and accessibility by public transportation.
Local and international competitors
The clothing trade is a fragmented sector. In every individual market H&M faces competition in the form of international and local retail chains, individual shops and department stores – each with its own profile and range of products.
Naturally, we monitor the actions of our competitors, particularly when it comes to prices. But above all we concentrate on our own offering. H&M’s ambition is to be the most attractive alternative for the customers at every location.
Adapted product range for each store
When a store contract is signed, work on planning, design, rebuilding and interiors begin. The goal is to have the store ready as fast as possible.
We adapt the range mix to each store, depending on factors such as location, size of store and customer flow in the area. The whole scale is represented – from large, full-range stores to smaller concept stores.
Increased clarity in stores
H&M’s stores are planned to promote self-service. The store environment must be comfortable, inspiring and generate well-being. It is important to give customers ideas and inspire them to choose things that suit their own style. Displays and mannequins are used to provide customers with inspiration for how to match clothes. We also help our customers to find their way around the collection and to combine garments and accessories successfully.
H&M always tries to surprise customers with something new and new products arrive at the stores every day. In 2005 we continued to focus on presenting our products more clearly and making our stores even more inspiring.
H&M customers must be able to find their way about in whichever H&M store they happen to find themselves, whatever the location. This is achieved by way of our store fittings and display.
The most important thing is to make the most of each particular store. The interior design is often standardised, but sometimes fittings are created for a particular store. One of our flagship stores which opened in November on Powell Street in San Francisco has, for example, a trendy and stylish interior.
Establishing concept stores is a way of continuing to grow in more mature markets and in big cities, and at the same time be more visible to our customers. The stores, which are aimed at a specific target group, supplement our full-range stores. Opening concept stores also allows H&M to utilise store locations with a smaller floor area (200–700 square metres).
We currently have concept stores for teenagers, women, children, men, as well as for underwear and accessories.
Constant rejuvenation
H&M’s stores must always feel fresh and appealing to our customers. Minor superficial renovations are carried out on an ongoing basis. More major renovations and alterations are carried out as needed and are dependent not only by the location and size of the store and its customer flow, but also by which concepts the store sells.
Our big city stores – a crucial element of H&M’s profile as a trendy fashion house – are renovated more often, as are our teenage stores. In 2005 our remodelling work included our big city centre store in Oslo and some of our larger stores in Germany. The most frequently visited stores need to be remodelled at regular intervals due to wear and tear.
Convenient shopping with H&M Mail Order and the Internet
Since 1980 H&M has offered its customers an alternative and convenient way to shop by catalogue through H&M Mail order. Here, again, the business concept is to provide fashion and quality at the best price. H&M Mail order operates in Sweden, Norway, Finland and Denmark.
H&M Mail order produces two big catalogues per year – a Spring catalogue and an Autumn catalogue. These catalogues are supplemented by a number of smaller seasonal catalogues with a particular orientation. The catalogue range is partly the same as in our stores.
Many customers also choose to shop at H&M’s online store. Online sales are administered by H&M Mail order and, like catalogue sales, this service is available in Sweden, Denmark, Finland and Norway.
Online sales became available in 1998 when it was set up on a trial basis in Sweden and then expanded over the next few years to the rest of the Nordic countries.
A considerable expansion of online and catalogue sales is being prepared to complement the stores in the existing markets. The Netherlands will be the first country outside the Nordic region to start online sales in autumn 2006. We see the Internet as one of several distribution channels, but we anticipate that the main part of our sales will continue to take place in our stores.
Our employees
At the end of the financial year (2006 ) H&M had more than 60,000 co-workers. The average number of co-workers was 40,368 (converted into full-time positions), 20 per cent of whom were male. H&M’s strong corporate culture – the spirit of H&M – has existed ever since the days of H&M’s founder, Erling Persson. This strong culture is of great value and is a contributory factor to H&M’s successes over the years.
The spirit of H&M
The spirit of H&M is based on a number of values that describe in simple terms how we want to work. These are in turn based on our business concept – fashion and quality at the best price. The fundamental values behind the spirit of H&M are among other things common sense and own initiative.
Within H&M we provide room for people to make their own decisions and take responsibility, and co-workers get regular feedback on their performance. An important part of H&M’s culture is to delegate responsibilities to the stores. Strong commitment and involvement are important, and co-workers are encouraged to take their own initiatives within a defined framework. Creativity and job satisfaction increase when there is a good working environment.
Co-workers in focus
Our co-workers’ commitment makes a major contribution to H&M’s successes. We believe in the abilities of the individual and encourage our co-workers to develop further. Respect for the individual is a fundamental value at H&M. This applies to everything from fair pay, reasonable working hours and freedom of association to the opportunity to grow and develop with the company.
Internal recruitment takes precedence
H&M principally recruits internally. Co-workers recruited from outside the company primarily join the company as sales staff for the stores, who later form a good recruitment base for positions of responsibility both within the stores and in other areas of H&M. This gives our co-workers every opportunity to develop continually, while at the same time ensuring that the spirit of H&M is spread throughout the company.
Job rotation and skills development
Job rotation is common at H&M. In the stores, for example, duties may vary between the cash desk, fitting rooms, unpacking, display and follow-up of advertising and campaigns. Working in the store provides very important experience and is a way of getting to know H&M from its very foundation.
Attracting and retaining skilled staff is important for H&M’s success. We therefore work constantly on skills development and all training is carried out within our own organisation. However, the biggest knowledge gain is made through active learning on the job.
All new members of staff are assigned a mentor. Newly appointed co-workers complete an introduction programme and thereafter receive regular training as needed in customer care, textiles and display.
The introduction programme guarantees that everyone has an equal base and insight into H&M’s way of working. Management training is also carried out, with the emphasis on being a good communicator of H&M’s values and setting a good example in this respect.
Support and transferring the culture to new stores and countries
When H&M opens a new store, the co-workers get support from experienced staff at established H&M stores who help to build up the store, recruit staff and run the business. In addition, they are important bearers of the culture and help pass on H&M’s values.
When H&M opens stores in new countries, it is even more important to provide support and to transfer knowledge from staff in established countries. Often a number of specialists will relocate to the new country for a longer period in order to pass on their specialist skills, so that the business can get going quickly.
Setting up operations in Ireland and Hungary was facilitated by help from the neighbouring countries. Dedicated co-workers made sure that their counterparts in the new countries gained the knowledge and the innate awareness of H&M’s values that is so important when new stores are established.
The World of H&M
H&M has expanded substantially in recent years and we have today more than 1,300 stores spread across 24 countries. Germany is our biggest market, followed by the UK and Sweden. We have great potential for continued expansion and growth this year, too.
H&M launched a franchise operation in the Middle East, in Dubai and Kuwait, during the autumn 2006. However, franchising is not otherwise part of H&M’s establishment strategy.
United Kingdom - Our first store outside Scandinavia. The first H&M store in the United Kingdom was opened in 1976 - now there are 103 around the country. H&M is developing well in the British market and we are now expanding at a higher pace then have previously been possible.
Year established: 1976 Number of stores 30.11.2006: 112 Sales in 2006: 6,769
Ireland - One of our latest market Our first Irish store opened in March 2005 in Dundrum, just outside Dublin. .
Year established: 2005 Number of stores 30.11.2006: 5 Sales in 2006: 327
The World of H&M
All garments in H&M's collections go through a number of quality and security tests. Today we have our own laboratories in the biggest production offices, as well as in the main office in Stockholm, where the tests are performed. Before the goods are delivered to our stores they have been tested several times. Shrinkage, wringing, colour fastness and dryrubbing are examples of things that we check. Extra high demands are put on children's clothes where no sharp objects or flammable materials may occur. Here you can read more about the important tests and our work with securing the quality of our products.
Zipper test Here we test the durability of the zipper.Flammability tests: The flammability of the fabrics are tested using strict restriction limits.
Chemical tests: A number of tests are performed with special care taken to substances that can provoke skin irration, allergies or cancer.
Button test: With a special machine we control that the buttons on all baby and children's clothes are attached safely.
Measurement test: The seams and measure of the garment is controlled, both before and after washing.
Nickel test: Here we make sure that buttons, zippers, jewellery and other metal details do not contain nickel. Read more about our nickel tests here.
Pilling test: The garment is tested to measure the appearance of pilling and abrasion.
PH-test: We make sure that the PH-value is neither too high nor too low. This is done to avoid skin irritation.
PVC-test: From January 1 2002 none of H&M's garments contain the plastic material polyvinyl chloride (PVC). Tests are performed to make sure this is followed.
Salt and chlorine-bleaching test: All swim wear are tested to make sure that their colours do not change or fade.
Washing test: Garments are tested to make sure that shrinkage, wringing and colour fastness are within H&M's limits. Washing tests are made several times during the production of the clothes.