Analyzing H&M

Résumé du document

Our previous paper had concentrated its analysis on H&M with the implementation and subsequent consequences of the square model. We thereafter discovered that this company has created a solid foundation for a success story and this in turn provides a very green picture to the business world especially the H&M sectors. In this upcoming paper, we will be delving into more details by trying to investigate why, how and through what means has this company managed to build such a strong brand image. We will also provide an analysis of H&M using the triangle model. The aim is that this triangle model, will uncover all the hidden stories with respect to the success of H&M.

Extraits

[...] Like José María Castellano, Spanish rival Inditex‘s former vice-president used to say: fashion industry always faces the risk of how well the public accepts its collections,‖4 people might love their lines at this moment and forget completely about that in the next. H&M gains a lot of publicity by getting world-renowned designers like Karl Lagerfeld or Stella McCartney into ―working‖ for it. For this season, Head of Design Margareta van den Bosch teamed up with the pop star and fashion figure-Madonna -to create a unique line called by Madonna‘ Stefan Stjernholm, analyst at Swedbank said. "There is going to be lots of interest for Madonna's collection, but it will also contribute to more interest in H&M in general. [...]

[...] Indeed, even if the annual % change still positive, the clothing retail market is in a maturity stage. Until now, H&M seem to be the perfect company in the perfect market but according to this curve we can ask ourselves: How H&M could increase the maturity stage‘s duration? For the next years to come, the market does not seem to be very favorable for the company. This does not mean that the company won‘t manage to maintain is level of growth, but it will be harder and the company will have to do additional efforts to stay and improve their position on the market. [...]

[...] 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. [...]

[...] Design and buying In 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 www.hm.com Analysis of H&M 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 majority of the rentals are due in 2007 - 2010. fixed assets are only 24,3% of total assets, but if all the leasing rights would be included in the balance sheet and considered as acquired real estates, the percentage would be as high as which is higher than any of the other competitors we have compared. All the profitability figures (ROE, ROIC, ROA) would be much lower with leases added to the total assets. Fixed assets % of total assets Fixed assets % of total assets Leasing adjustment for H&M H&M Inditex Gap Lindex Abercrombie & Fitch H&M Inditex Gap Lindex Abercrombie & Fitch Analysis of H&M Best business location principle and suppliers Best business location has been the company‘s principle from the start. [...]