H&M Hennes & Mauritz AB

H&M designs cheap but chic clothing, mainly for men and women 18 to 45, children's apparel, and its own brands of cosmetics. It operates about 1,400 stores in nearly 30 countries with direct sales operations in selected areas. Germany is H&M's #1 market, accounting for more than 25% of sales. About 60% of its clothing is made in Asia, the rest is manufactured primarily in Europe. 

Company History
H&M’s founder, Erling Persson, began as a businessman in Västerås, Sweden. During a trip to the USA in 1947, Erling became interested in a new kind of clothing store that combined a high turnover of garments at low prices. Upon his return home, he opened the first Hennes retail store in Västerås on September 13, 1947. He called it “Hennes” – the Swedish word for “hers” – because he sold women’s clothing exclusively. Hennes expanded steadily during the 1950s and 1960s. When the company expanded to Stockholm in 1968, Persson acquired Mauritz Widforss, a hunting and gun store located on Sergelgatan in Stockholm. His acquisition included the store’s stock of men’s clothing. The company changed its name to Hennes & Mauritz. Stefan Persson, Erling Persson’s son, was CEO for H&M from 1982 to 1998, a period of particularly rapid expansion. Since 1998, Stefan Persson has been executive chairman of the Board. Rolf Eriksen was appointed CEO in 2000.

Business Strategy
"Our business concept is to give the customer unbeatable value by offering fashion and quality at the best price. To be sure we can offer the latest fashions we have a design and buying department that creates our clothing collections. We ensure the best price by:having few middlemen; buying large volumes; having a broad, in-depth knowledge of design, fashion and textiles;    buying the right products from the right market; being cost-conscious at every stage; having efficient distribution. Good product quality is ensured through continuous quality controls. In addition to product quality itself, quality also means producing the items with minimal impact on the environment and under good working conditions." 

Primary industry ranking

 * #195 in Fortune Global 500
 * #73 in 2007 BRANDZ Top 100 Most Powerful Brands

Political and Public Influence
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Corporate Accountability
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Labor
History:
 * 1997: H&M code of conduct adopted
 * 1998: auditing of code of conduct begins
 * 2004: "H&M has found open and constructive dialogue with trade unions a positive experience and we welcome such relations wherever we operate. To draw attention to and safeguard fundamental principles and rights at work globally we have made an agreement with UNI (Union Network International) about working on these matters together."
 * 2005: adoption of Full Audit Programme, intended to gather more extensive information of code of conduct implementation
 * 2006: H&M joins Fair Labor Association for all production in China

Campaigns against company:
 * 1999: Swedish Clean Clothes Campaign criticizes implementation of code of conduct in Romania
 * 2001: Clean Clothes Campaign urges customers (including H&M) to insist of reinstatement of fired union organizers at PT Citra Abadi Sejati in Indonesia
 * 2002: report in Norwegian press about flawed implementation of code of conduct in Bangladesh forbrukerrapporten/2002/1039786190.07
 * 2004: National Labor Committee urges companies producing in Bangladesh to sign pledge to guarantee maternity leave

Major reports:
 * Fair Trade Center's Ethical Barometer (in Swedish)
 * Rena Kläder's 2006 Report on H&M (in Swedish)
 * Maquila Solidarity Network. 2006. Transparency Report Card

Human Rights
It has been showed by different internal policies, and international statements that H&M avoids any kind of source that collaborates, or indicates any help in countries that have a very poor Human Right's sense.

So is the case with countries like Burma, or Uzbekistan where the company has declared a simbolic war against the human right's breakers.

Even when it looks like companies as big as H&M, do their best to help human rights around the world, in places like Bangladesh the story may turn out different, since we understand that every company has a social responsability department, but when it comes to a business, deadline, and any buyer wanting somethings soon, then the social responsability goes down. "We see it here all the time. The CSR people come in and stipulate basic standards. Then the next day the buyers come in and drive down prices and bring forward deadlines."...And the "race to the bottom" in the mass marketing of cheap clothes is intensifying"

Environment

 * H&M's environmental objectives and policy
 * "H&M started using organic cotton in 2004, incorporating it into a selection of garments. The aim was to help increase the demand for organically cultivated cotton, which still only accounts for a very small percentage of world cotton production. Since then H&M has used an increasing amount of organic cotton and the quantity used this year is estimated at approximately 1,100 tonnes, compared with 30 tonnes in 2006. The cotton used by H&M is certified by the Control Union. It has been cultivated without the use of harmful chemicals. H&M has also been a member of Organic Exchange, an organisation that promotes organic cotton cultivation, since 2003."
 * "As of June 2005, H&M holds a licence to use the Flower, the official eco-label of the European Union (www.eco-label.com). The Flower stands for restriction of hazardous substances and reduced water pollution throughout the production chain, from the raw cotton to the finished product. "

Social Responsibility Initiatives

 * 1999: H&M starts a training project in Bangladesh. At H&M training centres students are guaranteed work as sewing machinists at one of H&M's suppliers when they have finished their training. Each intake consists of 50 students in total, divided between two training centres in Dhaka.
 * 2004: H&M and UNICEF signed a three-year co-operation deal for an education project for girls in developing countries and a project to prevent the spread of HIV among young people in Cambodia.
 * "Clothes that do not comply with H&M's quality requirements are not passed on to the stores. Instead, we have signed an agreement with a reputable aid organization in each sales country. We work with UNHCR, Oxfam, Caritas, the Red Cross and Terre des Hommes, to name but a few... H&M's US sales operation donates thousands of garments from its corporate facilities through Gifts In Kind International, a nonprofit organization that distributes products to community services groups that are improving the lives of people in need."

Business Scope
Today H&M has stores and production offices in around 40 countries all over the world and we continue to grow globally. In 2006 we moved into the Middle East and in 2007 we will establish our first stores in for example China and in 2008 also in Japan. 

Brands

 * H&M
 * L.O.G.G.
 * H&M Sport
 * BiB
 * Modern Classic
 * Divided
 * &denim
 * H&M Young
 * H&M Home

Suppliers
H&M does not have any factories of its own, but instead works with around 700 independent suppliers in primarily Asia and Europe. 

Identified suppliers:
 * PT Citra Abadi Sejati (Indonesia)
 * Sorste SA (Romania)
 * World Knits Ltd. (Mauritius)

Competitors

 * Arcadia
 * Gap Inc.
 * Zara

Financial Information (as of DATE)
Ticker Symbol: H&M B Main Exchanges: OM Stockholm Stock Exchange Investor Website: http://www.hm.com/us/investorrelations__investor.nhtml

List of largest shareholders
As of Dec. 2006:
 * Stefan Persson family (301,672,400; 69% of voting power; 36.5% of outstanding shares)
 * Lottie Tham (36,805,700; 2.2% of voting power; 4.4% of outstanding shares)
 * Alecta (26,850,000; 1.6% of voting power; 3.2% of outstanding shares)
 * JP Morgan Chase Bank (23,374,820; 1.4% of voting power; 2.8% of outstanding shares)

Largest Shareholders

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Governance
Executives

Board members & affiliations

 * Stefan Persson (chairman)
 * Fred Andersson (CEO, Nicator Group AB)
 * Lottie Knutson (Communications Director, Fritidsresor Group)
 * Sussi Kvart (Consultant)
 * Bo Lundquist (Head of family-owned investment company)
 * Stig Nordfelt (Consultant)
 * Karl-Johan Persson (Head of Business Development, H&M)
 * Melker Schörling (Founder & owner, MSAB)
 * Tina Jäderberg (Deputy employee representative)
 * Margareta Welinder (Employee representative)
 * Marianne Norin-Broman (Employee representative)
 * Agneta Ramberg (Deputy employee representative)

Executive/director compensation

 * CEO: SEK 11,900,000 (2006)
 * Chairman: SEK 3,900,000 (2006)

Date & venue of next AGM
May 8, 2008

Contact Information
Regeringsgatan 48

106 38 Stockholm

Tel:++46-8-796 55 00

http://www.hm.com

Related SourceWatch Articles
Business for Social Responsibility
 * Beatrice Engstrom-Bondy