HM Expansion (1)

8/11/2019 HM Expansion (1)

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Hennes and MauritzExpansion Universite C tholique de ouv in Louvain School of Management

Grace Habberfield

Karen Onate Alyssa Sullivan

Pr. F. Pouchain Pr. C. Brognaux


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Table of Contents

EXECUTIVE SUMMARY

I. MARKET ANALYSIS A. POLITICAL AND LEGAL FACTORS B. ECONOMIC FACTORS C. SOCIAL FACTORS D. TECHNOLOGICAL FACTORS E. ENVIRONMENTAL FACTORS F. KEY DRIVERS

II. SECTORS & COMPETITORS A. PORTERS 5 FORCES 1. THREAT OF SUBSTITUTES 2. RIVALRY AMONG COMPETING SELLERS 3. POWER OF SUPPLIERS 4. POWER OF RETAILERS/CONSUMERS 5. COMPETITIVE FORCES OF NEW ENTRANTS

III. COMPETITION AND THE MARKET IN THE UNITED STATES A. STRATEGIC GROUPSB. MARKET SEGMENTS C. CRITICAL SUCCESS FACTORS

IV. HENNES & MAURTIZ A. GENERAL DESCRIPTION OF HENNES & MAURITZ B. HENNES & MAURITZ SWOT ANALYSIS

V. RECOMMENDATIONS

CONCLUSIONS

FIGURES

BIBLIOGRAPHY


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EXECUTIVE SUMMARY

The fashion industry is one of the highest grossing industries in the world. The UnitedStates is generally viewed as a global trendsetter in the fashion world, but American

consumers hold foreign fashion houses in high regard, as well as domestic fashionhouses. Specifically, consumers in the United States hold European fashion houses inhigh regard. Despite the small number of H&M stores currently open in the UnitedStates, H&M has a strong following in the states.

For the US fashion industry, the following key drivers were found:

Economic growth

Brand preferences

Retail improvements

In the Porter analysis, it was found that the American fashion industry is highlycompetitive. Few substitutes exist for H&Ms ret il str tegy, but there re numerouspotential substitutes for the company itself. The power of suppliers to H&M is moderate.The risk of new entr nts to the m rket is extremely high, nd, th nks to the comp nysself-reliance, the bargaining power of retailers and consumers is only moderate.

The fashion industry is divided into five market segments: haute couture, luxury,affordable luxury, mainstream, and discount. H&M seeks to insert itself into them instre m segment of the United St tes f shion industry, nd lso to differenti teitself from the other foreign brands already present in the market.

It is our recommendation that H&M expand further into the United States,

despite the strong competition from already established brands. In particular, we feelthat expanding further into the southeastern region of the United States would prove tobe a lucrative investment for H&M. Through a reevaluation of its customer base,strategic collaborations with southern designers, and providing an online catalog andshopping feature to its website, H&M has a chance to expand its business and increaseprofits in the United States.

INTRODUCTION

Established in 1947, Hennes and Maurtiz or H&M has become a very successfulSwedish based fashion group. Their success has been based off their expansion not onlyinto many countries, but also the expansion of their lines. H&M offers a variety of

clothing options for women, men, children, nd teen gers. H&Ms promise to providefashionable garments of high quality and low prices has allowed for and ease ofexpansion into new areas and markets.

With this talent for expansion, H&M strategized the growth of their companyaround the world. Today H&M headquarters is located in Stockholm, Sweden, with alarge presence in Europe, North America, Asia and over 33 countries. In this paper wewill analyze and suggest new ideas for this company to allow a larger turning of profitand expansion into foreign markets.

Hennes & Mauritz for several years has for the most part been an extremelyprevalent fashion house in Europe, used mostly by the 15-25 year old age range. With

their expansion into Menswe r nd Childrens we r s well s developments in


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accessories, shoes, and cosmetics, H&M has been able to remain a front-runner incontrol of the fashion industry.

Most recently H&M have begun expansion into China using their influencealready well placed from other Asian countries as well as into Romania using their largeEuropean influence. What we propose for H&M is the expansion more so across theUnited States. Currently H&M has already established stores in the United Statescentralizing in California and New York, but we believe that it would be poignant toexpand into the Southern region of the United States.

I. MARKET ANALYSIS

A. POLITICAL AND LEGAL FACTORS

Hennes and Mauritz have experienced their fair share of political and legal problemsand accusations with the expansion into foreign markets. Most recently problems incertain Middle Eastern countries because of the cultural differences associated withdress. H&M found ways around that by deciding to operate through franchisingmethods. 26 This will not be as much of a problem in the United States because of thealready popular stores based mostly on the Northern East Coast. This expansion will nothave any serious entry barriers into the Southern market. However, there might beopposition to the entry of this fashion house because of the methodology in theproduction. H&M has recently faced accusations of using sweatshops in their clothingproduction as well as child labor. 28 This issue was addressed most recently in their

Conscious Actions Sustainability Report, while neither denying nor verifying their use ofchild labor in Bangladesh; the company seems to have taken a firm stand against it.While this is the best way for this problem to be handled, public outcry in the UnitedStates has been evident and this may be an issue faced when trying to enter into thenew markets in the Southern United States where family values are core values.

B. ECONOMIC FACTORS

The Southeastern United States in the past several years has experienced amassive economic boom. This is due to many foreign investors coming into areas andbuilding up manufacturing and the service sector economies. The Southeastern UnitedStates is one of the most populated regions in the US, with over 18 million people livingin Florida. This means that the Southeast is a prime target for investment with majorcities including Miami, Atlanta and Tampa. Not to forget to mention also some of thefastest growing and expanding cities in the country are in the Southeast includingCharlotte and Raleigh, North Carolina.

C. SOCIAL FACTORS

The South will seemingly be the hardest market to break into in the United Statessimply because of regional expenditure and income being the lowest in the nation.


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According to the U.S. Bureau of Labor Statistics Consumer Expenditure Survey from2009, the South has the highest number of consumer units (in thousands) with 43, 819.However, the average income before taxes is the lowest in the nation at $58,641. On thebright side with the average annual expenditure of $45,749, the South has the highestpercentage expenditure of income making it a prime location.

Some issues that H&M will encounter socially are the whiplash caused by theaccusation of throwing away clothes. The Southern United States for the past 20 yearshave had higher poverty rates than any other region in the United States according tothe Population Reference Bureau. With the accusation that clothes that had been unusedor unsold were being thrown out t the end of th t items se son might c use someoutrage by activist groups based in the United States. On a positive note however, in amove to potentially boost the company in the eyes of the communities in the South,H&M should have the ability to either start donating or selling the clothing at lowerprices to outlet stores in the area. This would help encourage the decreasing povertylevels in the South, the only region in the United States that has experienced this

decrease. Another social factor that H&M might have to deal with is their cotton

outsourcing. The Southern United States is the largest cotton-producing region in the USwith the US being the Worlds second l rgest cotton producer. H&M h s come intoscrutiny for the use of child labor in Uzbekistan in their supply chain, but also the issueof organically grown cotton has been a problem. Cotton farmers in the South might haveissues with H&Ms Org nic Cotton Mix nd boycott the comp ny. 14

H&Ms l rgest t rget m rket s of right now is the l rg est percentage of thepopulation in the South making it a good target. From the ages of 18-44, from the U.S.Census Bureau, the projection numbers from 2010 have these ages making up around36.3% of the Southern population. As of recently, it can be seen in children and youngadults wanting to look and dress more fashionable, which has caused extreme successin the South for several major brands including Forever 21, Wet Seal, and even higherend Southern Proper.

D. TECHNOLOGICAL FACTORS

Technology should be no major problem for H&M in the United States. The Southis accredited for, in recent years, having an enormous boom in high technologyindustries specifically in Virginia with 50% of the science and engineering labor forceemployed in information technology. While having probably a lesser-developedinfrastructure in the south, the United States has extremely able distribution systems,especially in the South with several major freights and truck business located there.

E. ENVIRONMENTAL FACTORS

The Southern United States having a much different environment may causesome problem. With a noticeably and statistically warmer environment, the winters donot reach the cold levels of many of the European nations. This means that H&M wouldhave to be able to provide more light winter options and more summer options in their


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clothing lines for this particular region. However, any stores in Southern California willhave to have similar merchandise so matching the two would work just fine.

F. KEY DRIVERS

Economic Growth: The Southern United States at the moment is experiencing some ofthe highest economic growth in the Nation. This is leading to more disposable incomeand higher expenditure. The poverty levels are dropping and the middle and upper classis expanding. This is especially true in regions that have become bases for manyinternational companies.

Brand preferences: The main target age and target sex market for H&M is anextremely large portion of the population in the Southern United States. This means thatthe products should be set up for a large amount of consumers. This age group hasbecome more preferential to certain fashion styles and a company that has done

extremely well in the United States fashion capitals (New York and Los Angeles) willperform well in almost any region. Also with the increase of foreign investors andbusinesses in the Southern United States, H&M will have the ability to provide a brandname with already positive connotations from their homes abroad.

Retail improvements: With the economy on an upswing from the recession, thedemand for apparel and woolen or cotton textiles has been increasing exponentially. 2The economic growth of 2010 has shown the demand for new clothing lines has notslowed. With a drop in apparel expenditure of 4.2 % overall in the United States in2009, 2011 would be a tactful year to open new stores with the economy andexpenditure rising.

II. SECTORS & COMPETITORS

A . PORTERS 5 FORCES

1. THREAT OF SUBSTITUTES

The substitutes for the industry in which H&M is placed are various. Since H&Mworks mostly out of physical retail space, the appropriate substitutes for the retailapparel, which will be shortened to just retail industry, would be relatively small. Thosesubstitutes would include factory stores, homemade clothes, tailoring, catalogs, andonline clothes stores. 41 Although the online substitute usu lly is n ddition to storesresources in selling options, in H&Ms c se, since online ret iling is still not offered tothe United States audience, this could pose a potential problem.

As for the substitutes in the apparel industry itself, there are many other optionssince the market itself is fairly fragmented. This means that the apparel market iscomprised of many different retailers who all essentially sell clothes.

This lack in diversity in clothes makes for a high threat of substitutes in theapparel industry.


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2. RIVALRY AMONG COMPETING SELLERS

A closer look into the specific submarket of highly fashionable but cost conscienceclothes retailing, like that which is H&M, shows that the substitutes in this submarketare prominent and easily accessible all over the world. Other low costs, fashionablestores in the United States that are more established than H&M and therefore areformidable substitutes are those like Charlotte Russe, WetSeal, and Forever 21.

In recent years, a fragmented market and moderate growth in the retail industryh ve incurred high level of riv lry. The womens we r m rket, which is wh t H&M ndits competitors focus most on, is forecast to have a value of $176.9 billion in 2014 in theUnited States, which will be a 9.4% increase since 2009. 41 This will mean an increase indesire for stores to gain a share of the market value and therefore, an increase in rivalry.

All in all, the rivalry among competing sellers is relatively high.

3. POWER OF SUPPLIERS

In the retail industry, there are many different materials used to make the apparel inwhich are included cotton, rayon, and silk. According to David Bassuk, retail managingdirector of AlixP rtners, R w m teri ls ccount for 25 percent to 50 percent of the costof producing a garment. Labor ranges from 20 percent to 40 percent, depending on howcomplic ted it is to m ke. 29

There are no substitutes for the fabrics used in different types of articles ofclothing, which gives certain power to the suppliers of these fabrics. However, sincethere are many suppliers all over the world and some are less expensive than other,globalization has decreased the power of suppliers in this industry. For example, Chinais the l rgest producer of cotton but it does most of its production t home for muchlower cost than the United States even though the United States is the second largestproducer of cotton and the largest exporter worldwide, exporting 40 to 60% of itsproduction. 1 In the United States, prices of cotton have doubled while other fabric priceshave jumped by at least 50%, which gives more power to the suppliers as well. 29

In the end, the power of suppliers is moderate.

4. POWER OF RETAILERS/CONSUMERS

In general, in the apparel retail market, the buyer power of actual consumers, in thiscase being all the individuals who actually buy the clothes to use them, is consideredmoderate. Although there are thousands of people throughout the world who buy

clothes which in turn lessens customer power, the fact that they tend to be brand loyaland want trendy fashions increases their power because the retailers have to give them


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what they want in the time frame within which the clothing is still in style and wantedby the consumers. If not given what demanded, the cost of switching substitutes forconsumers is low because of the similarity of the stores and products in the industry. 20

Depending on the region of the country, certain regions have less of a brandloyalty because the biggest concern is the sole function of clothes while in other regions,where there are more affluent customers, brand loyalty does play a role in the apparelretail industry giving customers more power . 20

H&M is a self-owned store that doesnt rely on outer ret ilers but r ther usestheir own retail stores throughout the countries where they have a presence.Franchising is also done by H&M and since a franchise is directly related to thecompany, it has little retail power as well. This would make the power of retailers asbuyers slim to none because of H&M being themselves who control the sell of theirproducts. Selling out of style and unsold clothes to discount retailers, like Ross or TJMaxx, would increase retailer power slightly but the bargaining power H&M would haveover the discount stores would override the ret ilers power nd give it b ck to H&M.

Overall, the bargaining power of retailers and customers is moderate.

5. COMPETITIVE FORCES OF NEW ENTRANTS

Many people can start a clothes making business, which increases the possibilities ofnew entrants because even those who work out of their houses can easily obtain the

necessary capital needed to make clothes. However, economies of scale are animportant part of the clothing retail market and the entry into a large, internationalselling sector the capital needed is at a higher level. 20

Already well established companies have an easier time with selling theirproducts at lower prices then those of individual boutiques and designers because ofthe multiple retail outlets and greater negotiating power with suppliers, although theyare also held more accountable for Social Corporate Responsibilities, like no child labor,or there is a risk of losing a lot of customers if not cautious of complying with thesesocial rules.

Absolute cost dv nt ge c n be reduced through the implement tion of new

technologies, che per inputs, skilled workforce, nd w ste reduction. 40This is easilyachievable in the retail apparel industry although one company can have the advantageonly until other companies start mimicking the process.

All in all, thanks to low entry barriers, low capital requirements, and easilyoverridden cost advantages, the competitive force of new entrants is high.


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III. COMPETITION AND THE MARKET IN THE UNITED STATES

A . STRATEGIC GROUPS

In 2010, over 100,000 stores made up the fashion industry in the United States. 24 Thelargest fifty companies account for more than half of industry revenue. These top fiftycompanies take sixty-five percent of industry revenue. The top five companies in theAmerican retail industry are all foreign brands, and include such names as Sain sburysfrom London, and LVMH, which is based in Paris, France. Three of the top fivecompanies are French, and the other two are based in the United Kingdom. 24

The fashion industry is divided into five segments: haute couture, luxury,affordable luxury, mainstream, and discount. Each segment can be further divided interms of price, exclusivity, and quality.

B. MARKET SEGMENTS

As previously mentioned, the fashion industry is divided into five market segments.Haute couture is the smallest segment and caters to the wealthiest clientele with brandnames such as Christian Dior, Chanel, and Givenchy. It focuses on quality rather thanquantity and makes few, custom pieces. These pieces, however, may sell for as much as$25,000 each. Products sold as luxury brand are also expensive, though not as much ashaute couture products, and still serve a wealthy clientele with designer names Gucciand Herms. Affordable luxury products can be seen as substitute products for luxurybrands. Affordable luxury brands such as Coach, Nordstrom, and Hugo Boss providehigh-end products at lower prices for those not wealthy enough to afford luxury brandnames. 11

Mainstream designers lack the feel of exclusivity that luxury and haute couturelabels afford, and focus on quantity rather than quality. These brands are immenselypopular with the American middle class because of their affordability and availability.Labels that fall under the mainstream umbrella include American Eagle, Gap, andAbercrombie & Fitch. The discount segment includes stores th t sell other br ndsproducts at reduced prices as well as brands that price their products below similarproducts from the other market segments. The discount segment caters to low-incomecustomers with brands such as Target, Cato and Payless. 11

H&M would belong to the mainstream segment. Brands in the mainstreamsegment price their products lower than the luxury segments. Mainstream brands areperceived as having lesser quality than luxury brands. Fashion houses in themainstream segment earn less money per garment than the luxury segment andtherefore focus on moving volume. Because they are both cheaper and more availablethan luxury product markets, mainstream brands appeal to both the middle and lowerclasses. 11

C. CRITICAL SUCCESS FACTORS


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In 2008, 94% of Americans had made purchases over the Internet, and 41% of onlineshoppers in the US had bought clothing over the Internet. 35 H&M currently does offeronline shopping but it is only available in certain European countries. 19 In early 2011,H&M announced via Twitter that they would be making online shopping available in theUS at the turn of 2011 and 2012. 38

The average size of the female American consumer is a 14, and 14 is the largestsize c rried in store by sever l of H&Ms competit ors in the mainstream marketsegment, such as American Eagle. H&M currently offers a plus-sized clothing line, BiB,but it is not v il ble in US stores. BiB is v il ble on H&Ms website, but H&M does notship to the US. 22 As 30% of the female population in the United States wears a size 12-16and 48% of women wear over a size 12, in order to maximize their profit in the UnitedStates, H&M would do well to either extend the sizes available in their stores or beginshipping their BiB line to the United States. 3

IV. HENNES & MAURTIZ

A. GENERAL DESCRIPTION OF HENNES & MAURITZ

Hennes and Maurtiz, commonly known as H&M, is a Swedish based companyestablished in 1947 in Vsters, Sweden by Erling Persson. The original name of thecompany was Hennes , which me ns hers in Swedish, bec use t the beginning only

womens clothing w s sold. In 1969, Persson obt ined hold of nother store c lledMauritz Widforss, that sold menswear, and subsequently the company was renamedHennes nd M uritz nd beg n to sell mens clothes s well. Now, their productportfolio h s exp nded even more to include teen ger nd childrens clothes, cosmetics,footwear, and accessories through their 2,200 stores in 40 countries around the worldwith different brands like COS, Monki, Weekday, and Cheap Monday. 19

During the financial year ended November 2009, Hennes and Mauritz recordedrevenues of SEK 118,697 million, an increase of 14.1% over 2008. 100% of its revenuescame from the clothing and cosmetics business division. H&M s l rgest geogr phic lmarket as of 2009 is the Euro zone, excluding Finland. This market reached SEK57, 229

million in 2009, an increase of 14.5% over 2008.20

H&M is a very unique company in the way that it operates and treats itscustomers, employees, and handles its distribution. Through the financial economiccrisis all over the world, H&M has been able to continue their success and keep fromcrashing like other international companies thanks to these small yet critical factors. Infact, one of their continuous goals is to continue to increase the number of stores everyyear by internal funding. 30

More stores means more employees and this is something that H&M takes veryseriously and uses to its advantage. Human resources are looked at more like an assetrather than cost of wages. There is a fundamental respect for the employees and various

options to help the continuous development of said employees. They are given thechance to work abroad, continue their studies, do job rotations, and apply their minds to


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solve problems within the comp ny. All of this en bles the comp ny to grow quickly, quote from He d of HR t H&M Mr. Pr D rj. He lso s ys to employees, If you do notgrow neither will H&M. 30

Some thing else that has helped H&M stay afloat during the economic downturnis its innovative supply chain management. Unlike most companies who distributeclothes everywhere, including places where there is no demand for the clothes, H&Mhas a specific core and non-core strategy to reduce the cost of production and sunkcosts. First, the clothes are designed in a centralized location in Stockholm, Sweden byalmost 100 in house designers who look at trends on the runway and on the streets. Because H&M does not have one single factory of its own, production is then outsourcedto a number of independent suppliers in Asia and Europe. Clothes with higher leadtimes are produced in Asia while those in high demand are produced in Europe. Lastly,the clothes are sent to the storage and distribution warehouse in Hamburg, Germanywhere it is sent to the various local distribution centers near H&M presence. Based onthe demand in certain areas, either more or less of a certain clothes are sent to the site.25The comp ny h s been known bec use of its str tegy of prov iding clothing designsexclusively for e ch countries preferences nd needs. 21

B. HENNES & MAURITZ SWOT ANALYSIS

Strengths and Weaknesses

H&Ms strengths lie in the low cost of production th t they h ve due to loc lpartnerships and the cutting of the middleman. This carries over the savings to theconsumers who, enjoying low prices, return for more. H&M also profits from a well-established brand name, relatively good perceived value, and good employee relations.Its we knesss include no available online shopping for the United States customer baseeven though online shopping is becoming increasingly popular. 20

Opportunities and Threats

Since H&M stores are few and sparse in the United States; there is a largeopportunity for growth allowance in the United States. The opportunity to add onlineshopping in the United States is also another opportunity that can also be considered a

threat as it could propel some consumers to turn to substitute stores. One of the largestopportunities for H&M is that it can offer and reach the particular niche market oforganic marketing. It is well on its way to conquering this market with already allorganic makeup, organic soaps, and the use of organic cotton in their clothes. 20 Hennesand Mauritz threats are the bad publicity done by rumors of bad social corporateresponsibility, like the use of child labor, and throwing away and ripping unsold clothesso they would not be copied. Also, the main population that H&M is trying to reach, theyoung adults, has less spending power thanks to a hurt economy and unemployment. 20

V. RECOMMENDATIONS


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Hennes & Maurtiz already is an extremely prominent fashion group that hasbecome incredibly popular over the past several years. This is because of the risingamount of the population of young adults that this brand specifically targets and theability of H&M to be able to move and open new stores extremely easily. H&M has takensteps to becoming a worldwide known brand and fashion label, especially with theircollaborations with high end lines such as Lanvin. H&M currently has stores across theglobe and has been extremely profitable over the last few years with the expansion intomenswear, clothing for children, and accessories. There are minimal areas that thisbrand has not largely expanded into, but there are regions of the United States that havebarely been touched by this brand.

Without a doubt the competition in the United States is extremely high as far asthis particular market is concerned. With similar brands like Forever21, Gap, and WetSeal it will be extremely difficult to persuade patrons of these already establishedorganizations to move to H&M. However, because the cost of switching between thesedifferent labels is minimal due to their similarly priced items, consumers will be more

likely to want to expand their brand knowledge. Entry into this market strictlycompetition wise will be difficult, but if proper marketing strategies are applied to thepotential markets it will be successful.

The potential market proposed for H& Ms entry is into the Southern region of theUnited States. In order to be competitive and successful, H&M will need to be able tounderst nd the consumer groups in the different re s of the region. The South has notbeen broken into, as far as high end lines are concerned, except in Metropolitan citieslike Atlanta and Miami. So the collaborative lines that H&M has done and will likelycontinue to do will sell extremely well allowing consumers to have access to the bigname lines for extremely reasonable prices. Price wise they are exactly the same as

probably their largest and most popular competitor in the South, Forever21, howeverH&M offers much higher quality clothing items and the store is much less of a headacheto go into than the extremely disorganized Forever21. The target markets in the Southwill likely be most popular in the young adult to child age range, which is probably amuch more conservative group of consumers than the markets they are used to inCalifornia and New York. Due to there methods of import/exportation there will be nomajor issues with distribution in the United States especially if the continue to use localdistribution methods.

In regards to marketing and the success of this brand in the Southern market,there are a few possible scenarios:

Understand consumer culture: The southern United States is knownfor being largely more conservative. In reference to fitting the clothingto the consumer group, more conventional cuts and colors wouldprobably do better for the first few years of entry until the clientelebase is better established. No crazy prints.

Start more metropolitan and branch out: The South is notoriousfor having extremely rural areas. By focusing on established/ growingcities like Raleigh, NC the second fastest growing city in the nationonly to Austin, TX. From establish in the cities the brand will be able towork its way into the suburbs and then rural areas of the south.


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Local Distribution: There are several large freight companies basedin the south, using these local distributors will be cheaper and easierfor getting clothing lines out on time.

Appeal to the organic/ vegan sector: With a lot of organic farmersbased in the southern United States, organic wear has becomeextremely popular. Expansion on this line would merit success.

Local Manufacturing: While already using sources from China andEurope in manufacturing, to get a strong base local manufacturing inthe United States is a possibility. The United States is second in cottonproduction in the world, this production largely based in the South. Byalso manufacturing in the United States, this would allow potentialnew consumers to gain more brand knowledge.

Strategic alliances with influential southern designers: Alreadyhaving collaborated with Lanvin, Karl Lagerfeld and Stella McCartney,

potentially partnering with more southern labels and brands likeSouthern Proper, Lilly Pulitzer, and Guy Harvey, this would connectwith very l rge concentr ted Southern consumer group, collegestudents/ fraternity and sorority members.

Expanding/ Creating online shopping: Online shopping isabsolutely a necessity now days for the consumer group that H&Mtries to reach; this would most definitely help the company maintainstability in the Southern market.

CONCLUSIONS

The United States fashion industry is an attractive destination not only forforeign companies, but for domestic endeavors as well. As mentioned in section three,the top five companies in the American retail industry are all European companies.Small domestic boutiques also make up a portion considerable of American retailers.The smaller domestic companies do not match the commercial giants in profits, butremain in business nonetheless. Apart from the domestic boutiques are largerdomestic lly owned comp nies, such s H&Ms riv ls G p, Inc., Wet Se l, nd Forever21,among others.

In the mainstream segment that H&M seeks to enter into, the majority, if not allof the companies present are domestically owned. The international companies thathave already penetrated the US fashion industry remain concentrated mostly in theluxury segments of the market, and domestic boutiques are subject to regionalpreference, leaving plenty of room for H&M to expand its US sales and enhance itspresence in America.


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FIGURES

Figure 1.

United States Womenswear market segmentation II: % share, by value, 2009

"Womenswear in United States." Datamonitor (2010): 1-41. Print.

Figure 2.

Forces driving competition in the Womenswear market in the United States, 2009


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"Womenswear in United States." Datamonitor (2010): 1-41. Print.

Figure 3.


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An illustr tion of H&Ms complement rities

Li, Jun, and MajaFrydrychowska. "The International Expansion of a MultinationalCompany-- A Case Study of H&M." Thesis. Mlardalen University, 2008.Mlardalen University, 19 June 2008. Web.

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Figure 4.

Timeline milestones for H&M


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Figure 5.

Entrance into New Markets/ Countries


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Figure 6.

Market entries and International Operations of H&M in 2007


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Documents

HM Expansion (1)