H&M, the Swedish fashion retailer, became famous for rapid conversions of runway fashions into affordable street clothing. This strategy led to stellar growth with thousands of store openings worldwide.
Lately, the company seems to have lost its momentum. Store sales have slowed, and unsold inventory has piled up. Clothing trends are very short-lived, making it difficult to introduce new products in a timely fashion (no pun intended).
This post is based on the NY Times article, H&M, a Fashion Giant, Has a Problem: $4.3 Billion in Unsold Clothes, by E. Paton, March 27, 2018. Image source:
Erica Simone Leeds.
1. What factors have contributed to H&M’s sluggish store sales?
Guidance: Discuss the intense competition from Zara and other competitors, the decline in brick-and-mortar retail store sales, distasteful advertising, the inability to respond quickly to changes in demand globally, and top management’s apparent failure to identify the roots of the problem and fix it.
2. According to the author of the article, luxury brands and quality apparel have made a come-back. From a product design perspective, what does it mean for H&M?
Guidance: Discuss the place of H&M’s fashions in the product life cycle (maturity/decline). Continue reading