INTRODUCTION TO SOURCING AND

MERCHANDISING- END TERM JURY

2025

NEHA GOWRIJ S

KANIRHYTHAMI S
NIRMAL A
 HENNES & MAURITZ
ABOUT THE BRAND:
H&M (Hennes & Mauritz) is a globally recognized
Swedish multinational fashion retail company known for offering trendy,
affordable, and sustainable clothing. Founded in 1947 by Erling Persson
in Västerås, Sweden, the company initially focused on women’s fashion
before expanding into men’s and children's wear. Today, H&M operates
in more than 75 countries with over 4,000 stores worldwide and a strong
online presence.

SALES REVENUE AND GROWTH:

SALES COMPARISION FOR PAST 5 YEARS FROM 2020 – 2025:

 Resilient Post-Pandemic Growth – After a challenging 2020, H&M Group

demonstrated a strong recovery, with net sales increasing from INR 1,606,948 million
in 2020 to INR 2,013,976 million in 2024.
 Peak Sales in 2023 – The highest revenue was recorded in 2023 at INR 2,027,558
million, showcasing H&M’s ability to capitalize on market recovery and consumer
demand.
 Moderation in 2024 – A slight decline in sales in 2024 compared to 2023 indicates
external pressures such as inflation, shifts in consumer preferences, and intensified
competition.
 Consistent Upward Trend Until 2023 – Sales grew steadily for three consecutive
years (2021-2023), reflecting effective business strategies, digital transformation, and
market expansion.
 25% Revenue Growth Over Five Years – The company achieved an overall increase
of approximately 25% in net sales from 2020 to 2024, demonstrating long-term
financial resilience.

Year Net Sales Operating Profit Profit After Operating

 (INR million) (INR million) Tax (INR Margin (%)
million)
202 1,606,948 26,620 10,689 1.7
0
202 1,709,758 131,160 94,609 7.7
1
202 1,920,927 61,592 30,648 3.2
2
202 2,027,558 124992 74,812 6.2
3
202 2,013,976 148,725 99,484 7.4
4

SALES IN 2024:
FULL-YEAR (1 DECEMBER 2023 – 30 NOVEMBER 2024)
 The H&M group’s net sales in the financial year 2024 amounted to INR
1,875,824 million (1,888,280). In local currencies, net sales increased by 1
percent.
 Gross profit increased by 4 percent to INR 1,002,392 million (967,168). This
corresponds to a gross margin of 53.4 percent (51.2).
 Selling and administrative expenses amounted to INR 863,320 million
(858,640). In local currencies, the expenses increased by 1 percent.
 Operating profit increased to INR 138,448 million (116,296), corresponding to
an operating margin of 7.4 percent (6.2).
 Operating profit increased by 28 percent compared with the previous year,
excluding the result from investments in associated companies and joint
ventures.
 The result after tax increased by 33 percent to INR 92,672 million (69,728*),
corresponding to INR 57.68 (42.96*) per share.
 Cash flow from operating activities before changes in working capital
increased by 26 percent and amounted to INR 293,960 million (232,848).
Cash flow from operating activities amounted to INR 254,048 million
(271,592).
 Cash and cash equivalents plus undrawn credit facilities were INR 286,048
million (356,560).
 The year’s increase in profit means that INR 1,888 million (1,416) has been
allocated to the H&M Incentive Program (HIP), which is for all employees.
 The H&M group’s sales in the period 1 December 2024 – 28 January 2025
increased by 4 percent in local currencies compared with the same period the
previous year.
 The H&M group’s greenhouse gas emissions in scope 3** reduced by at least
23 percent in 2024 compared to the 2019 baseline, according to preliminary
figures.
   CapEx in comparable currency is planned to amount to INR 88,000-
96,000 million for 2025. This is in line with CapEx in 2024, which amounted to
INR 92,800 million. The investments are mainly allocated to the store portfolio
and supply chain.
 The first H&M store in Brazil will open in São Paulo towards the end of 2025.
 The board of directors is proposing to the 2025 annual general meeting that
an ordinary dividend of INR 54.40 per share (52.00) is paid in two instalments.
 The board of directors will also ask the annual general meeting for a general
authorization allowing the board to choose to buy back the group’s own B
shares.

TARGET CUSTOMERS:
 • Youthful Audience: H&M primarily targets a youthful audience, including
teenagers and young adults in their 20s. These customers are fashion-
conscious, looking for the latest trends at affordable prices.
• Fashion-forward Individuals: H&M attracts customers who are interested
in staying up-to-date with the latest fashion trends. These individuals value
style and are always on the lookout for new and exciting pieces to add to their
wardrobe.
• Urban Dwellers: H&Ms target market also includes urban dwellers who live
in cities and metropolitan areas. These customers appreciate the convenience
of shopping at H&M's numerous locations in urban centers.
• Price-Conscious Shoppers: H&M appeals to customers who are budget
conscious and looking for affordable clothing options. The company's fast-
fashion model allows customers to stay on trend without breaking the bank
• Socially-conscious Consumers: H&M’s commitment to sustainability and
ethical practices resonates with socially-conscious consumers. These
customers are drawn to H&M's efforts to reduce its environmental impact and
promote fair labor practices

COMPETITORS:
1. Direct Fast-Fashion Competitors (Similar business model & pricing)
 Zara (Inditex)
 Uniqlo
 Forever 21
 Bershka (Inditex)
 Pull & Bear (Inditex)
 Mango
2. Mid-Range & Lifestyle Fashion Brands (Casualwear & trendy clothing)
 Marks & Spencer
 Gap
 Urban Outfitters

1. Zara (Inditex Group) vs. H&M

Zara, owned by Inditex, is H&M's biggest competitor in the fast fashion space. While
both brands follow a fast fashion model, their strategies differ significantly.

Business Model & Supply Chain

 Zara operates on an "on-demand" production model, meaning it designs,
produces, and delivers new styles within 2-4 weeks, leading to an ever-
changing inventory.
 H&M follows a more traditional seasonal production cycle, typically taking 3-6
months from design to retail.
Pricing & Positioning
 Zara is generally more expensive than H&M, positioned as an affordable
luxury or premium fast fashion brand.
 H&M, while stylish, is more budget-friendly, catering to a wider audience.
Target Audience
 Zara targets fashion-conscious, urban professionals who seek trendy but
high-quality apparel.
 H&M appeals to a broader customer base, including young shoppers,
families, and budget-conscious consumers.
Product & Design Approach
 Zara focuses on sophisticated, runway-inspired clothing, offering chic and
polished pieces with a European aesthetic.
 H&M is more diverse, covering basics, trendy fashion, and even
collaborations with designers.
Store Experience & Online Presence
 Zara has a minimalist, high-end in-store design, often resembling a luxury
boutique.
 H&M stores are brighter, busier, and more inviting for mass-market shoppers.
 Both brands have strong e-commerce, but Zara’s online presence is more
integrated with physical stores for seamless shopping.
Sustainability Efforts
 Both brands are criticized for fast fashion waste, but Zara is making strides
with its Join Life Collection (sustainable fashion).
 H&M’s Conscious Collection also promotes sustainable clothing, and it has
garment recycling programs in stores.

2. Uniqlo vs. H&M

Uniqlo, a Japanese brand under Fast Retailing Co., Ltd., is another key H&M
competitor, but with a different philosophy.

Business Model & Supply Chain

 Uniqlo focuses on "lifewear"—high-quality essentials that last longer rather
than fast-changing trends.
 Unlike H&M, Uniqlo follows a seasonal production cycle, using advanced
fabric technology and long-term planning.
Pricing & Positioning
 Uniqlo is slightly more expensive than H&M in many regions, but the quality
justifies the price.
 H&M focuses on affordability, whereas Uniqlo positions itself as a tech-
driven essentials brand (e.g., HeatTech, AIRism fabrics).
Target Audience
 Uniqlo appeals to minimalist, quality-conscious consumers who prefer
functionality over fleeting trends.
 H&M attracts trend-driven, younger shoppers who want affordable fashion
variety.
Product & Design Approach
  Uniqlo’s design philosophy is simple, functional, and timeless, often with
Japanese minimalism.
 H&M frequently follows seasonal trends, with more variety in patterns,
colors, and styles.
Store Experience & Online Presence
 Uniqlo stores are organized, tech-focused, and spacious, often with self-
checkout and digital displays.

 H&M’s stores feel more dynamic, trend-driven, and visually engaging.

 Both brands have strong e-commerce, but Uniqlo emphasizes its fabric
innovations and quality details online.
Sustainability Efforts
 Uniqlo promotes slow fashion, encouraging consumers to buy fewer, better
pieces.
 H&M pushes sustainability through recycling programs and Conscious
Collection, but critics argue it's still deeply rooted in fast fashion.

Factor Zara Uniqlo H&M

Speed to Ultra-fast (2-4 Seasonal planning Moderate (3-6

Market weeks) months)

Pricing Mid to high Mid-range Affordable

Style Focus Trendy, European Functional, Trendy + casual

chic minimalist basics

Target Fashion-conscious Quality-seeking Young trend-driven

Audience professionals minimalists shoppers

Sustainability Join Life Collection Slow fashion focus Conscious

Collection +
recycling

Store Luxury-like, Clean, organized, Vibrant, trend-

Experience minimalist tech-focused heavy

H&M Product Categories:

1. Women’s Wear
 Clothing: Dresses, Tops, T-shirts, Blouses, Jeans, Trousers, Skirts, Shorts,
Sweaters, Jackets, Coats, Loungewear
 Lingerie & Nightwear: Bras, Underwear, Pajamas, Shapewear
 Sportswear: Leggings, Sports Bras, Sweatshirts, Joggers
 Shoes & Accessories: Bags, Belts, Hats, Scarves, Sunglasses, Jewellery

2. Men’s Wear
 Clothing: Shirts, T-shirts, Polo shirts, Jeans, Trousers, Blazers, Hoodies,
Jackets, Coats, Suits
 Innerwear & Loungewear: Boxers, Briefs, Pajamas
 Sportswear: Training Shorts, Sweatpants, Hoodies, Performance T-Shirts
 Shoes & Accessories: Caps, Bags, Wallets, Belts, Watches, Ties
3. Kids’ Wear
 Baby (0-24 months): Bodysuits, Rompers, Sleepwear, Dresses
 Girls & Boys (2-14 years): Tops, Bottoms, Dresses, Jackets, Sportswear
 Accessories: Hats, Gloves, Shoes, Bags

4. H&M Home
 Home Décor: Cushion Covers, Blankets, Curtains, Rugs
 Kitchen & Dining: Tableware, Glassware, Storage
 Bathroom: Towels, Bathrobes, Accessories
 Bedding: Duvet Covers, Pillowcases, Sheets
H&M Price Points:
H&M follows an affordable to mid-range pricing strategy, catering to budget-
conscious and trend-focused consumers. Here’s the general price breakdown:

1. Women’s Wear
 Tops & T-Shirts: ₹399 – ₹2,499
 Dresses: ₹999 – ₹6,999 (casual to premium)
 Jeans & Trousers: ₹1,299 – ₹4,999
 Sweaters & Hoodies: ₹999 – ₹3,999
 Jackets & Coats: ₹2,999 – ₹12,999
 Lingerie & Nightwear: ₹599 – ₹2,999
2. Men’s Wear
 T-Shirts & Polo Shirts: ₹599 – ₹2,499
 Shirts: ₹999 – ₹3,999
 Jeans & Trousers: ₹1,499 – ₹4,999
 Sweaters & Hoodies: ₹1,299 – ₹4,999
 Blazers & Suits: ₹3,999 – ₹15,999
 Jackets & Coats: ₹2,999 – ₹14,999
3. Kids’ Wear
 Tops & Bottoms: ₹399 – ₹1,999
 Dresses: ₹799 – ₹2,999
 Outerwear: ₹1,499 – ₹4,999
 Shoes & Accessories: ₹499 – ₹2,999
4. H&M Home
 Cushions & Throws: ₹699 – ₹3,999
 Bedding: ₹1,499 – ₹6,999
 Kitchen & Dining: ₹499 – ₹3,499
 Bathroom Accessories: ₹499 – ₹3,499