Swedish Fashion Retailer H&M Maps Out Sustainable Growth Strategy

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H&M Studio

Since its founding in 1947, Swedish retailer H&M has grown to define fast-fashion in the highly competitive and quicksilver world. With nearly 4,000 stores worldwide, H&M plans to have more than 8,000 stores in the future. The retailer is also set to announce a new freestanding chain by year’s end, with the first stores opening in 2017.

The elixir in H&M’s success: high merchandise turnover and a pipeline constantly filled with new product to catch the latest wave of trending fashion. To achieve this scale, the company outsources production to more than 900 independent suppliers across the world.

H&M Conscious Exclusive 2016 collection

As industry excess, environmental accountability and humane labor practices are in the spotlight, H&M has refocused on sustainable practices. The retailer launched World Recycle Week soliciting unwanted, used, or damaged clothes for recycle or refurbishment and incentivizing consumers with coupons for contributing. Its “Conscious” collection uses recycled fabrics and more sustainable manufacture.

H&M joined the World Wildlife Fund on World Water Day in a five-year pledge focused on water stewardship, climate action, and the fashion industry’s broader sustainability challenges.

Ranked the second-largest global clothing retailer and firmly established in Western Europe, H&M plans to open stores in up to five new markets by 2017, aggressively pursuing legacy brands with a marketing savvy tuned to pop culture and social trends.

Its autumn 2016 collection campaign iterates on Tom Jones’ 1971 hit She’s A Lady, featuring model Adwoa Aboah, actress Lauren Hutton, Lion Babe’s Jillian Hervey, trans actress Hari Nef, and Design Army’s CCO Pum Lefebure.

H&M released a peek inside the ad campaign for its new Kenzo X H&M collection with Iman, Chloë Sevigny and Rosario Dawson from Jean-Paul Goude. To date, H&M has partnered with Karl Lagerfeld, Comme des Garçons, Balmain, Maison Margiela, Marni, and Versace.

E-commerce sales were strong this year as H&M entered seven new countries including Croatia, Estonia, Ireland, Latvia, Lithuania, Luxembourg, and Slovenia. Japan, Greece, Canada and South Korea are slated next.

With stores in 62 countries (and counting), parent H&M Hennes & Mauritz AB operates six retail brands—H&M, COS, Monki, Weekday, Cheap Monday and & Other Stories—with a seventh due by the end of this year.

CEO Karl Johan-Persson, who succeeds his father and grandfather, has led his company’s course correction. These include teams to check supplier standards and the launch of a fair living wage initiative affecting nearly 850,000 Bangladeshi workers by 2018. Anna Gedda, Head of Sustainability, said, “Transparency and a long-term approach is a starting point for all positive change. We will continue our work to make informed sustainable choices even easier.”

H&M scored top rating in the Fashion Transparency Index, created by Ethical Consumer and Fashion Revolution, based on a brand’s cognizance of its supply chains, corporate policies, and what it shares with the public about products and practices.

H&M Conscious

As disruptors like Amazon enter the fast-fashion landscape, Persson is not concerned. “I’m a huge admirer of Amazon,” he said. “H&M and many other companies will bring something different to the fashion world, and I think we can fare well, as we have shown.”

As for plans to announce a new retail brand by year’s end, Persson commented, “It will be a freestanding brand,” with the first stores opening in 2017.

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