Global Fashion Retail Chain Giant'S Way Of Doing Business

Chain from Sweden

The name of Hennes & Mauritz (H&M) may not be mentioned in Asia, but it is famous in Europe.

In terms of sales volume, H&M is Europe's largest apparel retailer, and its performance has continued to rise even in a recession.

Parity can bring a lot.

Parity is the way H&M has always chosen.

Founded in 1947, the founder is the father of current chairman Pearson (Stefan Persson).

At that time, H&M featured a par price. As Sweden's retail industry was the same as most European countries, it had always been dominated by expensive department stores, so H&M suddenly launched a big red market in the market.

After joining the company in 1972, he hoped that the company would be able to add popularity and quality characteristics beyond its sole low price.

Although many people believe that these characteristics can not exist in a brand at the same time, Pearson believes that the company can do it.

Later, H&M advertised "best price, providing popularity and quality", which really booted the company's success.

The products in H&M store are diversified, providing basic clothing for both men and women consumers and children, and selling cosmetics at the same time.

The average price of clothing in the store is only 18 dollars.

The company believes that parity can enable consumers to afford to buy new products in stores every year or even every season.

This strategy best attracts 15 to 30 years old women who want to be able to catch up with the fashionable women at any time.

In order to reduce costs, in order to maintain parity strategy, H&M does not have its own garment factory, and manufacturing is totally outsourced to nine hundred factories.

In order to get the best price, the company chooses carefully the outsourcing objects, which are scattered among the 21 lowest wage countries in the world.

Due to the proper cost control, the company's selling price is low, but its gross profit can still be maintained at around 53%.

In addition to price cards,

Still playing popular cards.

The company regards popularity as perishable food and must keep it fresh at all times. Therefore, the company strives to minimize inventory and keep new products in circulation.

So new ideas must be quickly pformed into costumes so that consumers can quickly buy clothes on the shelves and display fashionable clothes in the street.

To achieve this efficiency, all the costumes of the company are designed by eighty designers in the company.

The company and its suppliers work closely together to strictly control the whole process, and play the role of importers, wholesalers and retailers to minimize the number of products to be processed so as to make the process more concise.

H&M compresses the time from the design to the loading of the clothes. The shortest time is only three weeks, and the speed is one of the highest in the industry.

The company therefore has the ability to introduce popular products at any time.

In addition, every day, the company analyzes the sales performance of each garment separately by country and storefront and grasps which products are hot. It needs to increase production and supply goods more smoothly.

The company advertised the storefront every day to replenish the products that consumers need most.

In the spring of 2003, when H&M opened its flagship store in New York, because the crowd was too crowded, the company could even meet the needs and purchase every hour.

Actively open up the earth

H&M copied the three in one formula successfully to other markets.

Although H&M is from Sweden, the largest market is in Germany.

In 1982, when Pearson took the company from his father, H&M had only more than 100 branches, and most of them were in Sweden.

Today, the company's ambition has been burning from Europe to the Americas, with more than 800 branches in fourteen countries, and 88% of its turnover last year came from foreign markets.

The number of new stores opened in 2003 is expected to reach ninety.

The expansion rate of the company in the past 6 years is about 75%, and the goal now is to enter a new country every two years.

Keith Wills, an American retail market analyst, commented: "no European retailer can expand abroad so rapidly and successfully."

Pearson said in a recent interview that his father had questioned whether the expansion policy of the company had gone too far. Sometimes he would ask Pearson, "Why are you so anxious?" after all, his father set up the first foreign branch in London 29 years after he founded the company.

Pearson said that the answer he gave his father was very simple, that is, "when you are hot, you can not stop to cool the heat."

Do not relax details

Besides strategy, the execution of details is also an indispensable factor for H&M's success.

Nathan Cockrell, a retail analyst in London, said: "the way H&M is run is by comparison."

Pearson looks and talks more like a financial expert than a retail magnate.

He controls the company's expenditure in person.

In order to reduce costs, in 1990s, Pearson even confiscated his staff's mobile phone. Nowadays, only a few top executives in the company have mobile phones, and companies encourage employees to take business class and taxis only in exceptional circumstances.

Although it is necessary to save money in small areas, the company is willing to do so in matters of great importance.

H&M has invested 4% of its annual revenue in marketing expenses. Advertising has hired famous photographers.

The company believes that shopping at H&M must be very easy and interesting, so the company attaches great importance to store design and product layout details.

For example, the message conveyed by the window display, the information on the clothes, the design of the changing room, etc.

In order to make it easy for customers to find the storefront, the company will find the best location at any cost without planning the location of the new branch.