Inside The H&M Fashion Machine

By Sarah Raper Larenaudie Monday, Feb. 16, 2004 Read more: http://www.time.com/time/magazine/article/0,9171,993352,00.html#ixzz2258ahcOy To remedy a cold, Juliette Bonk recommends aspirin and a new pair of jeans. That's what brings the 24-year-old to the H&M flagship store in Paris on her way home from work one recent evening. Around her, a group of teenage girls trolls for emergency club gear; three Russian tourists buy lingerie; and a shopper misplaces her Louis Vuitton handbag. A gruff female voice breaks through the pop sound track to discourage standing in line for the fitting rooms: "You have 30 days to change your mind and return purchases." Bonk doesn't bother to try on anything. She doesn't buy the jeans she came for either. "Once again I've been had. But I'm happy," she says, showing off her new beige pullover, a fringed top, chalk-striped pants, a T shirt and three hair accessories. Total cost: $133. If all goes well, Bonk's boyfriend will pay for her goodies, and she'll be back, she says, in less than a month. By then H&M will have changed its windows, and there will be hundreds of new $13 T shirts splashed with retro sports logos, alongside bulky acrylic turtlenecks and cropped, V-necked varsity sweaters, each for about $19. That's the Swedish company's specialty: serving up a never-ending stream of must-have new looks at prices none of its European competitors can match. In an age of fast fashion, when every street corner in every city offers the latest look for under $100, H&M is the fastest and cheapest source for trends. And yet it is surprisingly stealthy, based in a modest brick building in central Stockholm and run by a large group of mostly Swedish designers who cull the hippest looks from the multitude of styles emitted by TV, music videos, the street and the runway. With annual sales of about $6 billion, H&M is smaller than Gap Inc. (sales top $15 billion, and the Gap brand represents 46% of that) but bigger than its closest rival, Zara, which reports annual sales of just over $4 billion, nearly three-quarters of its parent Inditex's total. H&M founder Erling Persson could never have envisioned a future with 900 H&M stores in 18 countries back in 1947, when he opened a dress shop called Hennes (hers, in Swedish) in a suburb of Stockholm. But from the start, he was confident that his idea of stylish but inexpensive fashion--inspired by American high-volume, low-cost clothing stores-could have appeal well beyond Sweden. In the past three years the company has opened 65 U.S. stores, and according to analysts, is planning to open an additional 35 by 2005. In each market, the stores offer both basic and fashion-forward lines for women, men, teens and children. In every European market it has entered, H&M has put pressure on local retailers, says Francoise Sackrider, a retail specialist at the Institut Francais de la Mode, in Paris. "The high level of goods and the sophisticated environment at these stores wiped out any complexes shoppers had about less expensive stores."

What sets H&M apart from most competition is its lightning turnaround--a garment can move from design to hanger in just 20 days. (Only Zara can go faster--14 days--but its prices are 30% to 50% higher than H&M's. By comparison, Gap's minimum turnaround is three months, though almost all the merchandise is produced in nine.) As a result, H&M can add looks that weren't in its collections or increase quantities if an item takes off. For example, last fall, when mod miniskirts began to sell, H&M tripled the original order on a black wool mini and distributed it to all markets instead of just a handful of key stores. "But we needed to have our customers' response," says H&M design director Margareta van den Bosch. "We don't trust the runway." The nerve center of H&M's design operation, the so-called White Room in the company's Stockholm headquarters, is where Van den Bosch, 61, holds forth when she's not scouring flea markets in London or fabric fairs in Paris. She took the top design job at H&M in 1987 and functions more as a soft-spoken den mother--as opposed to an edictissuing tyrant--to her team of 90 designers (mostly women). According to colleagues, Van den Bosch is the person who most completely understands the H&M customer. "If it's too complicated on a hanger and if it's too avant-garde, maybe it's not us," Van den Bosch explains. However, risky, unpopular colors or shapes are always possible. "You can have everything, but you have to think about the right quantities." Although she oversees the design of the more than 500 million items that H&M sells every year, Van den Bosch is not an international celebrity like Karl (Lagerfeld) or Miuccia (Prada). When Van den Bosch started at the company, H&M was mostly buying up collections offered by Southeast Asian agents and putting them together in the store like pieces of a mismatched puzzle. In the late '80s, Van den Bosch began building a design team, and today it has access to the latest in computerized design software and color-matching programs, tools available only to billiondollar international companies. In the design studios, there are computers at every workstation, and the runways are only a click away. Miu Miu and Marc Jacobs are interesting references, says Van den Bosch. "Prada is a very good designer but not someone we should look too much at. [The clothes] are made up with very exclusive fabrics and are very worked." In any case,

copying is strictly forbidden, and an H&M spokeswoman says there have been very few complaints. H&M keeps its eye on competitors' marketing strategies too. The company may even invite a "star" designer to oversee a special collection for the store, similar to Target's collaboration with Isaac Mizrahi, but Van den Bosch says nothing has been finalized. Usually the company's design direction converges with the luxury houses' trends, but not always. One popular look H&M passed on a few years back was camouflage prints, judged by the Swedish management to be "war inspired." It has also banned vulgar or sexist language on T shirts and provocative children's clothing.

In the ateliers, color wheels, fabric samples and vaults of vintage finds illustrate the theme for spring, which is '50sstyle femininity. It's a look that has also cropped up on runways, but according to Sara Wallander, co--head designer for the Divided collection, it's been in the air for a while. She caught onto it last spring when she became obsessed with finding a new pair of jeans. "Suddenly I had to have a pair of really straight-legged, unwashed denims," she says, blinking behind oversize glasses she picked up at a hip-hop store in Tokyo. She wore the jeans regularly to work--partly to convince colleagues they were going to be right for spring 2004, which the team began planning last May. Others were feeling strongly about ditching baggy cargo pants. "It's a longing for femininity," says Ann-Sofie Johansson, the other co--head designer for Divided. Ladylike Audrey Hepburn dresses, full skirts and twin sets were the next logical step. Denim took a rockabilly turn with selvage. The fall runways substantiated the new direction, but Van den Bosch remains cautious: "We feel very much for narrow trousers, but the customers aren't ready." So H&M is offering intermediary versions as well, and the moment sales data spike, tens of thousands more pairs will be ordered. Amazingly, every H&M store is restocked daily. A high-volume store like the Boulevard Haussmann flagship in Paris can receive as many as three truckloads of clothing a day. The bulk of the restocking is done between 7 a.m. and 9 a.m., so there's almost a science to shopping H&M. Experienced bargain hunters learn that the store displays two of every size at a time. When the mediums are sold out, for example, there will be more the next morning. Employees advise friends to come Tuesday to Friday mornings, within hours of the restocking. How can H&M's prices be so much lower than competitors'? The enormous quantities ordered from suppliers (H&M owns no manufacturing plants) allow spectacular economies of scale that the company passes on to consumers. The company also credits cost controls--few executives have secretaries, for example. But human-rights groups charge that H&M, among others, keeps prices down by exploiting workers in Third World countries. Like other multinational groups that came under fire in the '90s, the company in 1997 instituted a code of conduct, which all suppliers must sign, and maintains inspectors in countries where its products are made. Still, watchdog groups continue to cite problems, including excessive overtime and lax health-and-safety regulations. Says Carl-Henric Enhorning, director of H&M investor relations: "We believe the best way to have a positive impact in developing markets is to be there and to be buying so that they have money to live on." A different problem is the widespread perception among even the most enthusiastic customers that H&M's quality is poor and that the stores are difficult to shop. "I'm an H&M bulimic," says Olivia Benier, 25, who shops the Paris store. "The quality is not the best; but the real problem, it's Berezina," she says, referring to Napoleon's costly and chaotic river crossing as he retreated from Moscow. "You have to dig, sort and slave for a bargain. I wear light clothes to go shopping there because otherwise you're so hot you'd lose 50 kilos."

One of H&M's most important assets, say those who observe the sector, is its corporate culture, which encourages flexibility and adaptation. A recent program to even out inventory levels boosted H&M's gross margin by a remarkable 3 points, to 55%. (Gross margin is a key measure of how efficient a retailer is at its core business of selling goods.) Henrik Schultz, chief analyst at Danske Equities, praises the way H&M has handled its international expansion and says the key silhouette he sees in the future is the dog bone: bulging growth for less expensive fashion like H&M's at one end and for luxury apparel at the other end but thinning prospects for brands priced in the middle. Fast-forward several decades, and try to predict what historians will choose as the representative fashion of our decade. Will it be the ubiquitous Gucci ads featuring Amazons in tight leather? Nicole Kidman's haute couture Oscar gown? Probably not, says Van den Bosch. "If you don't see it on the people, it won't be a fashion."

Democratic Design
By Feifei Sun Monday, Oct. 03, 2011 Read more: http://www.time.com/time/magazine/article/0,9171,2094365,00.html#ixzz2259XCKnu

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In May 2008, Donatella Versace declared she would never follow in the footsteps of Lagerfeld, McCartney, Cavalli and so many others by creating an inexpensive collection for a mass retailer. This fall her modestly priced diffusion line reaches H&M stores nationwide. Versace's change of heart may have been inevitable. Though once viewed as a crass dilution of haute fashion brands, diffusion lines have become virtually de rigueur for iconic designers in search of a few populist credentials. Here, a look at some of the most memorable meetings of upper-crust fashion with lowprice retail. AUGUST 2003 Isaac Mizrahi for Target The first major collaboration between a high-fashion designer and mass retailer NOVEMBER 2004

Karl Lagerfeld for H&M Too-small quantities and too-large sizes angered the Chanel creative director, who vowed not to work with H&M again NOVEMBER 2005 Stella McCartney for H&M Shouting and shoving were reported at some shops; H&M's marketing director called the line "the ultimate in massclusivity" FEBRUARY 2007 Proenza Schouler for Target Though pieces (ranging from $10 to $140) cost a fraction of real Proenza Schouler items, the effect was more chic than cheap NOVEMBER 2007 Roberto Cavalli for H&M Another hit, but the Italian designer's trademark animal prints looked tacky on boxy silhouettes and tatty fabrics SPRING 2008 Alice + Olivia for Payless Stacey Bendet's first foray into footwear included ballet flats, patent-leather booties and platform sandals NOVEMBER 2008 Comme des Garons for H&M With $40 T-shirts and a $350 dress, this was one of the highest priced--and best quality--diffusion lines MARCH 2009 McQ Alexander McQueen for Target In stores, the muted McQueen offerings were hard to differentiate from regular Target items OCTOBER 2009 +J Collection, Uniqlo Designed by Jil Sander, the trenches, knits and denim mimicked the minimalist aesthetic of her high-end output $30,000 VERA WANG $1,200 WANG FOR DAVID'S BRIDAL DECEMBER 2009 Rodarte for Target Natalie Portman wore a $40 shift from the line to a New York Times event a month after its release FEBRUARY 2011 White by Vera Wang for David's Bridal Some of Wang's bargain gowns were almost as detailed and elegant as her originals SEPTEMBER 2011 Missoni for Target First-day demand for the discounted zigzag goodies repeatedly crashed the company's website NOVEMBER 2011 Versace for H&M Donatella Versace's Iconic Collection will include studded leather, costume jewelry and men's formal wear