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The world of megabrands: H&M – Inspired by the Stars

This is the business idea: Fashion and quality at the best price. You think this is too simple and trivial? Correct – the simplest concepts are usually those that have the biggest impact….

Who knows, whether Erling Persson was aiming for international success when he opened his first store for women's wear in 1947 under the 'Hannes' label (in Swedish 'hers') in Stockholm. After acquiring the hunting gear store Mauritz Widforss in 1968, men's wear was added to the portfolio along with the second name of the label that has continued to expand across Europe – and now also worldwide. Currently the label owns 1,400 shops. In recent years expansion focused on establishing points-of-sale in North America and in 2006, the first shops were opened in the Middle East (Kuwait and Dubai). H&M also operates shops in Hong Kong and Shanghai and is planning to open more in Tokyo by 2008.
The company, one of the leading European businesses in the industry, generated 68.400 billion Swedish krona (7.3 bn. euro) in revenue with 60,000 employees during the fiscal year 2005/06.


Something for everyone and still unique

Young, trendy, affordable and still so hip that even major stars are sporting it – this is how H&M promotes its fashion in the highly competitive and shrinking textile market. More than 100 designers collaborate to ensure that the two red letters do not simply chase recent trends, but become trendsetting. Fur this purpose prominent design icons were hired such as Stella McCarthney, Viktor & Rolf or Karl Lagerfeld, who provide authentic glamour feeling to mostly young consumers and turn the uncomplicated, urban image into lifestyle for every wallet.
When high-profile Hollywood stars, the likes of Tim Roth, Jade Jagger, Benicio del Toro and Madonna or Kylie Minogue shine on billboards – either with their own collections or simply by giving an appreciative testimonial – and cult film-makers like David LaChapelle enter the image competition by launching opulent commercials, H&M, the Young Fashion label, becomes an authentic emotion. This is how fashion has to be! Something for everyone and still unique. With a mix of basics, star collections, underwear and accessories. Furthermore, inspiring, a stage for ideas, creative and adapting, as if it was designed for everyone who wears it.


Look, an H&M!

And of course the shop locations! - Part of the company's strategy is shops in top locations along shopping streets and in shopping centres. H&M stores are located on Brompton Road in London, on Kurfürstendamm in Berlin, on Fifth Avenue in New York or at the Beverly Center in Los Angeles. The 'low-cost brand' H&M is not afraid to be showcased alongside designer brands. Affordable products in top and expensive locations – this guarantees attention.

For those who prefer the privacy of their own home, an online dressing room has been launched, where customers can try on virtually the collections by entering their individual measurements. An online shop (already operated in Scandinavian countries) will follow soon.


Collection of Style

H&M's plans of launching a new label and retail chain – 'Collection of Style' (COS) – to position itself amongst higher-priced fashion, are commented by experts of the industry not as a response to low-cost brands from Asia but to its European competition.
Aside from the British COS flagship store on Regent Street in London, additional COS stores were opened in Germany earlier this year. Ten COS stores are planned to open in select large cities by the end of 2007 – of course only in top locations.


Political Correctness

The question is, how does H&M respond to its success? For one of the market leaders in Europe, corporate social responsibility is one of the soft skills that consumers and the public call for at the same time. Thus, H&M adheres to a Code of Conduct based on ILO (International Labour Organization) conventions and the UN Convention on the Rights of the Child. Approximately 700 suppliers (H&M does not own its own factories) are required to meet them and are constantly monitored by H&M auditors. In 2006, H&M became a member of the FLA (Fair Labor Association). FLA carries out independent audits of suppliers' factories in China.
Furthermore: As a member of WaterAid, a charity organisation, H&M sponsors – with approximately 10 percent of the revenue from the Kylie collection – protection of clean water and creation of improved sanitation for the poorest nations.
H&M has also been actively promoting environmental protection – by introducing organic cotton products and being licensed to use the 'Flower', the EU's official eco label. The Flower represents restrictions on harmful substances and reduced water pollution throughout the production chain. That can also be interpreted as 'good quality'…


Anna Voltren