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

Hennes & Mauritz, 2012

by John R. Wells and Galen Danskin

Abstract

In 2012, Hennes & Maurtiz (H&M) was the second-largest specialty apparel retailer in the world. Sales for fiscal 2012 were $18.1 billion and operating profits were $3.3 billion. H&M operated 2,776 stores, 93% of them outside its home base of Sweden. Over the past decade, H&M had passed Gap in sales, but the company had failed to keep up with Inditex's growth and its Spanish rival had larger sales and greater profitability than H&M. H&M had also lagged behind Inditex in supply pipeline speed, brand diversification, online retail presence, and expansion into China. Meanwhile, the world's leading hypermarket chains, including Wal-Mart and Tesco, were making significant headway in apparel and challenge H&M's basic clothing segment.
In 2012, CEO Karl-Johan Persson, grandson of the company's founder Erling Persson, promised increased expansion into underdeveloped markets, a stronger push to online retailing, and the launch of a major new retail brand. Whether Persson's plans were enough to catch up with Inditex remained to be seen.

Keywords: fashion; Fashion Industry; strategic decision making; strategy; Strategy; Supply Chain; Competitive Strategy; Corporate Strategy; Fashion Industry; Europe; Sweden;

Citation:

Wells, John R., and Galen Danskin. "Hennes & Mauritz, 2012." Harvard Business School Case 713-512, June 2013. (Revised March 2014.)