Marketing 50

Hennes & Mauritz

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Cheap and chic don't often land in the same sentence, much less in a company's mantra. But perhaps that's what helped Hennes & Mauritz build a chain of 1,000 stores in 20 countries, with its mission to bring a selection of low-price fashion to shoppers in Europe and North America.

"Everything we do is based on our core business value, which is fashion and quality at the best price," says Jorgen Andersson, 39, H&M's director of marketing, who oversees the global chain from its Stockholm headquarters. "Our competitors might beat us on fashion, quality or even on price, but we control the three parameters together."

Over the last three years, that strategy has resulted in 40% more stores, 60% higher annual turnover-U.S. revenue alone was $340 million in 2003-and after-tax profit up 150%.

Marketing, which often features well-known actors and models, is coordinated in-house with agencies retained for creative on a campaign-by-campaign basis. The primary focus is on in-store merchandising, followed by outdoor boards that Mr. Andersson likens to party invitations. "Our highest priority is the store itself," he says.

One key is that new inventory arrives every day. "You have to go on a Friday even though you were just there on Tuesday. That's one of the thrills of visiting," he says.

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