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Founded in 1947, Swedish clothing retailer Hennes & Mauritz AB (STO: HM-B), commonly known as H&M, has grown into one of the most recognizable brands in the fashion industry. H&M has more than 5,000 stores worldwide and employs 120,000 people.

Not surprisingly, the COVID-19 shutdown had an impact in 2020. The company reported strong growth in online sales but overall sales still came in 5% down in September 2020 over the same period one year earlier.

The company said it would permanently shut down 350 stores starting in 2021, but that doesn't mean it's giving up on brick-and-mortar. Its executives seem to have concluded that the real world and the online world work best in tandem. "More and more customers started shopping online during the pandemic, and they are making it clear that they value a convenient and inspiring experience in which stores and online interact and strengthen each other," said CEO Helena Helmersson. "We are increasing digital investments, accelerating store consolidation, and making the channels further integrated."

The Secret to H&M's Success: Fast Fashion

The secret to the success of H&M and its rivals like Zara and Forever 21 can be attributed to the fast fashion business model.

Fast fashion relies on moving a large volume of merchandise from the designer table to the showroom floor in the shortest amount of time possible and at a reasonable price. Aimed at young, fashion-conscious urban consumers, their products are trendy and they're cheap, bordering on disposable.

That naturally has gained them some criticism from advocates of sustainable and ethical consumerism.

Fast fashion retailers make their profits by having a high merchandise turnover and by constantly resupplying the product pipeline with the latest trends.

H&M's model also relies on a solid marketing team that can quickly determine what the target demographic desires and get it into the supply chain fast.

H&M's Brand of Fast Fashion

While fast fashion is not limited to H&M, the Swedish brand has a distinct business model. Unlike Zara, H&M does not manufacture its products in-house but outsources its production to more than 900 independent suppliers around the world, mainly in Europe and Asia, which are overseen by 30 strategically located oversight offices.

To incentivize fair working conditions, H&M introduced a pilot program for its Bangladesh and Cambodian factories which involved the company purchasing 100% of the factories' outputs over a five-year span. H&M hoped that by being the sole customer, it is better able to ensure safe working conditions while increasing productivity more naturally, as opposed to attempting enforcement through routine compliance inspections.

Secondly, only 80% or so of all store merchandise is stocked year-round, while the remaining 20% of H&M products are designed and stocked on the fly in small batches, depending on the prevailing trend. To ensure timely delivery and fast lead times, H&M relies on its state-of-the-art IT network, which allows integration between the central national office and satellite production offices.

By mid-2021, H&M appeared to be recovering from the pandemic, but not without some difficulty. In June 2021, the company reported sales jumped 25% from the year before but were down 4% from its 2019 numbers.

China seemed to be a problem area. Sales in that nation fell 23% after the retailer was booted off its popular Tmall website and some domestic phone app stores in response to H&M's expressions of concern about alleged human rights abuses. China accounts for 5% of the retailer's total sales and is one of its top suppliers.

American investors can follow Hennes Mauritz via its American Depository Receipt, Hennes Mauritz ADR (HNNMY), which is listed on the NASDAQ.

Shares closed on Aug. 13, 2021, at $4.13. Its 52-week range was between $3.04 and $5.22.

The Bottom Line

Since its founding in 1947, H&M has grown to become the world's second-largest fashion retailer, after Inditex, owner of the Zara stores.

The continued success of both retailers depends on their application of fast fashion, which relies on spotting fashion trends as they appear and getting inexpensive copies of them into their stores as quickly as possible.

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The Swedish fashion retailer has taken the fast-fashion concept to new heights, with a mix of online and real-world stores.

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Hennes & Mauritz AB (H&M) group is a Swedish company engaged in designing and retailing of apparels and other accessories. H&M has operations in over 60 countries and also has a significant online presence. H&M is the second largest clothing retailer in the world and is renowned for its fast-fashion clothing.

Strengths in the SWOT Analysis of H&M :

A wide range of Products: H&M has a wide range of product offerings including apparels, cosmetics, shoes and accessories for a wide range of customers. H&M group also have products such as blankets, the collection of vases and pots; candle and candle holders etc.

Unique Identity for all brands: H&M sells its product portfolio through many different brands such as H&M, COS, Weekday, Monki etc. All its brands have a unique identity depending on customer target group.

Diversified global presence: H&M has a strong and diversified presence geographically across the globe. H&M has stores in over 60 countries across 6 continents. H&M has expanded in the recent years in potential markets such as Asia and Africa. Strong global presence enables the company to minimise business risks.

Strong financial performance: H&M has reflected strong financial performance in the previous financial years. In FY 2015, H&M showed a growth in revenue of 19.4% over the FY 2014. A strong financial performance increases investor's confidence and provides financial flexibility to the company.

Weaknesses in the SWOT Analysis of H&M :

Dependence on third party suppliers: H&M is excessively dependent on third party suppliers for its merchandises. H&M outsources product manufacturing to about 800 independent suppliers and hence it has lower control over production. Over dependence on the third party, vendors can affect company's order commitments and any bad customer experience can affect the brand image.

Following after trends: H&M produces affordable clothing and is dependent on many independent suppliers and pick up after trends from luxury brands.

Affordable pricing affects quality: H&M is popular for making affordable clothing, but that sometimes affects the quality of the clothes and other products of H&M.

Opportunities in the SWOT Analysis of H&M :

Focus on expansion to improve profitability: H&M has been focusing constantly on expanding its store base across the globe. The company added 400 new stores in FY 2016. Such expansion plans can help H&M improve its bottom-line as well as the top-line.

E-commerce as a platform: H&M is also present on E-commerce in various countries. H&M needs to expand in the E-Commerce platform as well to serve to a larger market. E-commerce can be the future of the apparel industry and H&M needs to make use of the platform to its potential.

Expand in emerging markets: The emerging markets in the world possess a great potential as far as the apparel industry is concerned. H&M needs to explore the emerging markets like Asia and Africa in order to capitalise on the new demand created.

Improving Lifestyle: The purchasing power and the lifestyle of people are improving across the globe. People are more brand-conscious and thus it provides an opportunity for brands like H&M to capitalise on the need generated.

Threats in the SWOT Analysis of H&M :

Evolving fashion trends: Apparel industry is subject to quick changes as trends keep changing quickly. Social media has also played a part in quickening the process of changing trends. H&M has to deliver according to the new trends in the market or else it can lag behind in the industry.

E-Commerce allows new entrants: E-commerce is an advantage as well as a threat for the popular brands as E-commerce allows newer brands to be present on the same platform as the popular brands and hence such new entrants could affect the business of brands like H&M.

Intense competition: The apparel industry is subject to intense competition from local as well as global brands. Each company has to be aware of the competition in order to be on par with the new trends and fashion.

Rising labour costs in developed countries: Rising labour costs affect the cost of production for the industry. Such increasing costs affect profitability for the company.

A risk of foreign exchange fluctuations: H&M group's reporting currency is Swedish Krona but most of its sales come from developed economies such as Europe and the US. The threat of foreign exchange rate with respect to the powerful currencies can affect the profitability.

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SWOT Analysis of H&M - Hennes & Mauritz SWOT analysis

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Hennes & Mauritz AB (H&M) group is a Swedish company engaged in designing and retailing of apparels and other accessories. H&M has operations in over 60 countries and also has a significant online presence. H&M is the second largest clothing retailer in the world and is renowned for its fast-fashion clothing.

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In 2009, Primark was looking to grow both its business and reputation. But with little awareness of the store's in-house brands and innovative fashion credentials their commercial aspirations were being hampered. Working on a retainer basis, our experienced design team has since orchestrated the Primark annual fashion calendar -encompassing over 40 global campaigns, international photoshoots and product launches.

In our time working together, the business has transformed into a powerhouse fashion brand, with profits and share price both trebling.

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Primark Brand Identity & packaging design | The One Off

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For ambitious clothing chain Primark, we were tasked with establishing the brand as the high street's go-to 'fast fashion' retailer, find out more here.

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Adored by fashion fans and value seekers alike, Primark is widely established as the destination store for keeping up with the latest looks without breaking the bank.

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They own many businesses and Primark is one of them in the retail sector.

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Associated British Foods plc - About us - Our group - Our businesses

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Primark falls under the fashion industry due to the products they sell, for example clothing alongside shoes and accessories. They look at what the customer desires and therefore what they would purchase because fashion trends change all the time.

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Fashion retailing, marketing, and merchandising

Once the clothes have been designed and manufactured, they need to be sold. But how are clothes to get from the manufacturer to the customer? The business of buying clothes from manufacturers and selling them to customers is known as retail. Retailers make initial purchases for resale three to six months before the customer is able to buy the clothes in-store.

fashion retail Comstock-Jupiterimages/Thinkstock

Fashion marketing is the process of managing the flow of merchandise from the initial selection of designs to be produced to the presentation of products to retail customers, with the goal of maximizing a company's sales and profitability. Successful fashion marketing depends on understanding consumer desire and responding with appropriate products. Marketers use sales tracking data, attention to media coverage, focus groups, and other means of ascertaining consumer preferences to provide feedback to designers and manufacturers about the type and quantity of goods to be produced. Marketers are thus responsible for identifying and defining a fashion producer's target customers and for responding to the preferences of those customers.

fashion retail Digital Vision/Thinkstock

Marketing operates at both the wholesale and retail levels. Companies that do not sell their own products at retail must place those products at wholesale prices in the hands of retailers, such as boutiques, department stores, and online sales companies. They use fashion shows, catalogs, and a sales force armed with sample products to find a close fit between the manufacturer's products and the retailer's customers. Marketers for companies that do sell their own products at retail are primarily concerned with matching products to their own customer base. At both the wholesale and the retail level, marketing also involves promotional activities such as print and other media advertising aimed at establishing brand recognition and brand reputation for diverse characteristics such as quality, low price, or trendiness.

Closely related to marketing is merchandising, which attempts to maximize sales and profitability by inducing consumers to buy a company's products. In the standard definition of the term, merchandising involves selling the right product, at the right price, at the right time and place, to the right customers. Fashion merchandisers must thus utilize marketers' information about customer preferences as the basis for decisions about such things as stocking appropriate merchandise in adequate but not excessive quantities, offering items for sale at attractive but still profitable prices, and discounting overstocked goods. Merchandising also involves presenting goods attractively and accessibly through the use of store windows, in-store displays, and special promotional events. Merchandising specialists must be able to respond to surges in demand by rapidly acquiring new stocks of the favoured product. An inventory-tracking computer program in a department store in London, for example, can trigger an automatic order to a production facility in Shanghai for a certain quantity of garments of a specified type and size to be delivered in a matter of days.

By the early 21st century the Internet had become an increasingly important retail outlet, creating new challenges (e.g., the inability for customers to try on clothes prior to purchase, the need for facilities designed to handle clothing returns and exchanges) and opening up new opportunities for merchandisers (e.g., the ability to provide customers with shopping opportunities 24 hours per day, affording access to rural customers). In an era of increasingly diverse shopping options for retail customers and of intense price competition among retailers, merchandising has emerged as one of the cornerstones of the modern fashion industry.

Fashion designers and manufacturers promote their clothes not only to retailers (such as fashion buyers) but also to the media (fashion journalists) and directly to customers. Already in the late 19th century, Paris couture houses began to offer their clients private viewings of the latest fashions. By the early 20th century, not only couture houses but also department stores regularly put on fashion shows with professional models. In imitation of Parisian couturiers, ready-to-wear designers in other countries also began mounting fashion shows for an audience that combined private clients, journalists, and buyers. In the late 20th and early 21st centuries, fashion shows became more elaborate and theatrical, were held in larger venues with specially constructed elevated runways ("catwalks") for the models, and played an increasingly prominent role in the presentation of new fashions.

© K2 Images/Shutterstock.com

By the early 21st century, fashion shows were a regular part of the fashion calendar. The couture shows, held twice a year in Paris (in January and July) by the official syndicate of couture designers (comprising the most exclusive and expensive fashion houses), present outfits that might be ordered by potential clients but which often are intended more to showcase the designers' ideas about fashion trends and brand image. Ready-to-wear fashion shows, separately presenting both women's and men's wear, are held during spring and fall " Fashion Weeks," of which the most important take place in Paris, Milan, New York, and London. However, there are literally dozens of other Fashion Weeks internationally-from Tokyo to São Paolo. These shows, of much greater commercial importance than the couture shows, are aimed primarily at fashion journalists and at buyers for department stores, wholesalers, and other major markets. Extensively covered in the media, fashion shows both reflect and advance the direction of fashion change. Photographs and videos of fashion shows are instantaneously transmitted to mass-market producers who produce inexpensive clothing copied from or inspired by the runway designs.

Media and marketing

Media of all kinds are essential to the marketing of fashion. The first dedicated fashion magazines appeared in England and France in the late 18th century. In the 19th century, fashion magazines-such as the French La Mode Illustrée, the British Lady's Realm, and the American Godey's Lady's Book-proliferated and flourished. Featuring articles, hand-coloured illustrations (known as fashion plates), and advertisements, fashion magazines-together with other developments such as the sewing machine, department stores, and ready-to-wear clothing produced in standard sizes-played a significant role in promoting the democratization of fashion in the modern era. The development of effective and inexpensive methods of reproducing photographs in print media in the early 20th century led to the rise of fashion photography and of heavily illustrated fashion magazines such as Vogue. Magazine advertising rapidly became a principal marketing tool for the fashion industry.

The creation of cinema newsreels-short motion pictures of current events-and the rise of television made it possible for people all over the world to see fashion shows and to imitate the fashionable clothing worn by celebrities. The dominance of visual media continued in the Internet age, with fashion blogs emerging as an increasingly important means of disseminating fashion information. Red-carpet events such as awards ceremonies provide an opportunity for celebrities to be photographed wearing designer fashions, thus providing valuable publicity to the designers.

1950s fashions, Paris Stock footage courtesy The WPA Film Library

World fashion

Most people in the world today wear what can be described as "world fashion," a simplified and very low-cost version of Western clothing, often a T-shirt with pants or a skirt, manufactured on a mass scale. However, there are also numerous smaller and specialized fashion industries in various parts of the world that cater to specific national, regional, ethnic, or religious markets. Examples include the design, production, and marketing of saris in India and of boubous in Senegal. These industries operate in parallel with the global fashion industry on a minor and localized scale.

One significant development in the field of ethno-religious dress was widespread adoption of the hijab (religiously appropriate attire) among Muslim women not only in the Middle East but throughout the Islamic world in the early 21st century. With millions of Muslim women living in numerous countries worldwide, veiling norms and styles are myriad. For some, veiling can mean a withdrawal from the vicissitudes of fashion altogether. Other women, including those for whom modest garments are obligatory in public, may wear fashionable European styles underneath their more conservative street attire. Still others have sought looks that are themselves both chic and modest. At the beginning of the 21st century the international market for modest fashions was growing. Muslim and non-Muslim designers produced a widening selection of appropriate and stylish looks, and numerous fashion blogs and magazines targeting Muslim women became available. Some designers and manufacturers confronted not only the aesthetics of modest attire but also the practical challenges associated with conservative dress, as seen in efforts to produce modest yet effective swimwear and sportswear for Muslim female athletes.

The fashion system

The fashion industry forms part of a larger social and cultural phenomenon known as the "fashion system," a concept that embraces not only the business of fashion but also the art and craft of fashion, and not only production but also consumption. The fashion designer is an important factor, but so also is the individual consumer who chooses, buys, and wears clothes, as well as the language and imagery that contribute to how consumers think about fashion. The fashion system involves all the factors that are involved in the entire process of fashion change. Some factors are intrinsic to fashion, which involves variation for the sake of novelty (e.g., when hemlines have been low for a while, they will rise). Other factors are external (e.g., major historical events such as wars, revolutions, economic booms or busts, and the feminist movement). Individual trendsetters (e.g., Madonna and Diana, princess of Wales) also play a role, as do changes in lifestyle (e.g., new sports such as skateboarding) and music (e.g., rock and roll, hip-hop). Fashion is a complex social phenomenon, involving sometimes conflicting motives, such as creating an individual identity and being part of a group, emulating fashion leaders and rebelling against conformity. The fashion industry thrives by being diverse and flexible enough to gratify any consumer's desire to embrace or even to reject fashionability, however that term might be defined.

Valerie Steele John S. Major

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Fashion industry - Fashion retailing, marketing, and merchandising

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Fashion industry - Fashion retailing, marketing, and merchandising: Once the clothes have been designed and manufactured, they need to be sold. But how are clothes to get from the manufacturer to the customer? The business of buying clothes from manufacturers and selling them to customers is known as retail.

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Primark has grown by a huge amount over the past 11 years as it generated a revenue of around 7.1 billion pounds last year. Alongside a 7% share of the clothing market.

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As the name suggests, Associated British Foods (ABF) is primarily a food processing, grocery, and agriculture business, which started off as a bakery. However, since 1969, ABF has had its own retail division, Primark, which offers affordable clothing. Over the years, Primark steadily grew and has now become a leading value clothing brand. In 2023, the brand generated approximately nine billion British pounds in revenue.

Global presence

The first Primark store opened in Dublin in 1969, under the name of Penney's. The store enjoyed considerable success and started to expand into other countries. The company now has approximately 400 stores located in 14 countries across Europe and the rest of the world, including the UK, the Republic of Ireland (still trading as 'Penneys'), Portugal, the United States, and most recently, Poland, Slovenia, and the Czech Republic. Primark also has hundreds of supplier factories around the world, mainly concentrated in Asia.

UK popularity

The UK is Primark's primary market, where it is, according to some metrics, the most popular value apparel brand in the UK, ranking above other value apparel competitors such as TK Maxx and supermarket own brands, like George at Asda. Primark's popularity is underlined by the fact that it had the most customers of all men's clothes stores in Great Britain in 2021.

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Primark's 2022 revenue came to almost 7.7 billion pounds. The annual revenue of Primark has generally increased, although their highest sales came in 2019.

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Primark illustrates their way of selling their products at the lowest price through a video by mainly stating they buy their products in bulk.

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People sometimes ask how Primark products can be so cheap. Here we explain how we make savings to keep prices low

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Clothing Market including Primark and other retailers

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Clothing Market including Primark and other retailers

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Primark to become biggest clothes retailer in Britain: After years at number one, M&S is set to lose top spot

Primark is gearing up to knock Marks & Spencer off pole position as the UK's biggest selling clothes retailer, in what would be a landmark moment for the High Street.

The budget chain has seen its market share soar in recent years, while arch-rival M&S has been hammered.

Figures from analysts at Global Data suggest M&S's market share by the end of 2018 will be 7.6 per cent, while Primark's will be 7 per cent.

Primark sales are growing rapidly while M&S - due to report its latest results today - are declining. At this pace it could see Primark overtake M&S as early as next year.

According to annual reports, Primark made £7billion sales last year, up more than £1billion on the previous year. Of its 345 shops, 182 are in the UK.

Marks & Spencer, by contrast made sales of £3.8billion from its home and clothing division, down 2.8 per cent on the previous year. Rival Next had sales of £4billion, with £2.3billion from its retail arm.

M&S, which was founded in 1884, has seen its market share in clothing halve by value in just two decades.

But while the crisis gripping the High Street forces retailers to close hundreds of shops, Primark is opening more - next month it will create 500 jobs with a store in west London.

In the 24 weeks to March 3, Primark pulled in an 8 per cent revenue boost to £3.5billion. Profits climbed 6 per cent to £341million.

Meanwhile M&S is ramping up its closure programme with plans to shut 100 stores by 2022 - 40 more than previously announced.

Yesterday it said the additional closures put almost 700 jobs at risk - it has 1,025 stores in the UK and employs 85,000 people.

Maureen Hinton, group retail research director at Global Data, said M&S is in danger of losing its dominant position in the clothing market.

She added: 'Marks & Spencer has dominated the market for decades, but its lead as number one is perilously close to being lost to Primark.

'The closure of yet more stores will hasten the decline unless it can shift the lost sales to its online channel and transfer to its other stores.

'But it also has to start growing total non-food sales to stem the overall decline.'

Over the past decade, M&S has lost 2.2 per cent of its market share as it tried to keep up with changing tastes and shopping habits.

Of the top 20 retailers in the UK, only Philip Green's Arcadia Group has lost more share, down 3.1 per cent, after it sold the BHS chain.

David Buik, an analyst at Core Spreads, said: 'Retail does look dire in the UK, but it is the dynamics that have changed. The consumer is looking for much more of a bang for their buck.

'M&S has spent most of the past decade surrendering ground to the likes of Primark, Boohoo, H&M, Zara and even Next. M&S's fashions are desperately dowdy and have little appeal to the young, who are very savvy and price conscious.'

Analysts are preparing for M&S to announce another drop in profits today, which could see it crash out of the FTSE 100.

M&S declined to comment.

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Primark to become biggest clothes retailer in Britain

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Figures from analysts at Global Data suggest M&S's market share by the end of 2018 will be 7.6 per cent, while Primark's will be 7 per cent.

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Segmentation, Targeting and Positioning of Primark

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Segmentation, Targeting and Positioning of Primark