Case | HBS Case Collection | June 2013 (Revised March 2014)

Hennes & Mauritz, 2000

by John R. Wells and Galen Danskin


In 2000, Hennes & Mauritz (H&M) was the second-largest and most global player in the fashion retail business. It operated 682 stores, 80% of them outside its home country of Sweden, and achieved revenues of $3.0 billion and operating profits of $375 million. In 1999, when H&M announced plans to enter the U.S., sales had grown 20% per year and operating profits, 30%, for a decade. After the August announcement of U.S. expansion plans, its share price hit a record $35 (a P/E of over 90). But the new millennium brought challenges and uncertainty. In March 2000, the first nonfamily CEO, Fabian Mansson, resigned after only two years at the helm and the company issued a profits warning. In September 2000, H&M's share price closed at $18.68, a fall of nearly 50% from the prior year. Meanwhile Gap, the world's leading fashion retailer with revenues of $13.7 billion, was adding 600 stores a year and expanding into Europe from its U.S. base. Rolf Erikson, Masson's replacement, impressed few analysts and questions lingered about H&M's ability to maintain its rate of expansion. What did new CEO Rolf Erikson need to do to avert the threat from Gap and restore the company's fortunes?

Keywords: strategy; strategy alignment; strategic planning; fashion; Fashion Industry; Risk Management; Competition; Problems and Challenges; Management Teams; Globalized Firms and Management; Expansion; Distribution Channels; Retail Industry; Fashion Industry; Sweden;


Wells, John R., and Galen Danskin. "Hennes & Mauritz, 2000." Harvard Business School Case 713-509, June 2013. (Revised March 2014.)