S U M M E R 2010
Retailing
TABLE OF CONTENTS
1. Williamsburg, Virginia, and
Melbourne, Australia, Host
Strategic Planning and
Management in Retailing
Program
2. Strategic Planning and
Management in Retailing
Does Cases!
3. Hennes and Mauritz
CO NTACT
BABSON COLLEGE
Babson Park, MA
02457-0310 USA
Phone: 1-800-882-EXEC
or +781-239-4354
Fax: +781-239-5266
E-mail: exec@babson.edu
www.babson.edu/bee/retailing
LAWRENCE J. RING, EDITOR
Chancellor Professor and
EMBA Alumni Distinguished
Professor of Executive Education
Mason School of Business
The College of William and Mary
larry.ring@mason.wm.edu
N E W S L ET T E R
PROGRAM SUMMARY
Williamsburg, Virginia, and Melbourne,
Australia, Host Strategic Planning and
Management in Retailing Program
The Strategic Planning and Management in Retailing Program was conducted in
Williamsburg, Virginia, at the Mason School of Business of The College of William and Mary
in May 2010. In addition, the program was offered in Australia later in the month at the
Mt. Eliza Executive Education facility of the Melbourne Business School just outside of
Melbourne. This program is currently offered twice in North America (at Babson and at
William and Mary) and once in Australia. The program is next scheduled to be offered
September 11–17, 2010, at Babson College. Those interested are encouraged to apply
early. For more information, please visit www.babson.edu/bee/retail or contact Deirdre
Murphy at dmurphy@babson.edu or at 781-239-4340.
The programs kicked off with “The Eight Ways to Win in Retailing,” and, with slight differ-
ences from program to program, featured cases on Target Stores, Best Buy and Best Buy in
2005, Seven Eleven Japan, Starbucks, Home Depot, Zara and Zara in 2007, and Meijer. In
addition, the faculty delivered lectures and exercises on financial and productivity analysis,
strategic thinking and planning, category scorecards, customer relationship management,
customer and associate satisfaction, and supply chain management, including a simulation.
On Wednesday afternoon at the Williamsburg program, the group participated in a store
tour with visits to Wal-Mart Supercenter, Target Greatlands, Costco, Lowe’s, World Market,
Martin’s, Best Buy, hhgregg, PetSmart, Toys “R” Us, T.J.Maxx, and others. In addition, they
were given a guided tour of Colonial Williamsburg, followed by dinner at Shields Tavern in
the restored colonial area.
Australia program participants enjoyed the Mt. Eliza Executive Education Center, set in its
picturesque waterfront position on the shores of Port Phillip Bay. It is ideally located near
The program is next scheduled to be offered September 11–17, 2010, at Babson
College. Those interested are encouraged to apply early. For more information,
please visit www.babson.edu/bee/retail or contact Deirdre Murphy at
dmurphy@babson.edu or at 781-239-4340.
 ST R AT EG I C P L A N N I N G A N D M A N AG E M E N T I N R ETA I L I N G D O E S C A S E S !
the traditional resort areas and the burgeoning wine,
food, and golf district of the Mornington Peninsula.
Participants in the programs represented nine countries:
the United States, Australia, Canada, Colombia,
Hungary, New Zealand, Norway, South Africa, and
Sweden. The group included companies in the drug,
food, furniture, apparel, home improvement, consumer
electronics, office supplies, optical, convenience, and
consulting sectors. The class was composed of senior
executives from buying and merchandising, marketing,
store operations, strategic planning, human resources,
logistics and supply chain, finance and control, and
business development. Professors Larry Ring and John
Strong were the primary program faculty for each of the
programs. Professors Ron Hess and Ram Ganeshan
also participated in the U.S. program.
B A B S O N E X E C U T I V E E D U C AT I O N R E TA I L I N G N E W S L E T T E R
Strategic Planning and
Management in Retailing
Does Cases!
The Strategic Planning and Management in Retailing
Program faculty always have relied heavily on cases to
illustrate the models we use in the program and to give
participants an opportunity to apply them. Cases also
allow us to present examples from many retail sectors.
Increasingly, we have come to write and produce our own
case materials for both the open enrollment program and
custom versions of it. Many of these cases may be of
interest to our readers.
This newsletter features one of our most recent cases:
Hennes and Mauritz, the rapidly expanding Swedish fast
fashion retailer. It is available in soft copy from me at
larry.ring@mason.wm.edu. This case is organized around
the Homans Model and the Pentagon and Triangle. In
addition to the H&M case, we have several other recently
written cases that can be ordered. They include:
1. Lowe’s Stores in 2010, (authored by Larry Ring, Ron Hess,
and Amruta Kanitkar), 2010, 28 pp., W&M-M-170.
2. Target Stores 2006–2009: Fall from Grace or Slight
Misstep? (authored by Ron Hess), 2009, 16 pp.,
W&M-M-169.
3. Starbucks (B): Period of Poor Strategic Decisions,
(authored by Ron Hess), 2009, 4 pp., W&M-M-168.
4. Hennes and Mauritz, (authored by Larry Ring and Rachel
Hutson), 2009, 21 pp., W&M-M-167.
5. Zara in 2007, (authored by Larry Ring and Elizabeth
Galloway), 2008, 21 pp., W&M-M-164.
6. Target Stores in 2006, (authored by Larry Ring, Gregory
Higgins, and Xiaobing Nie), 2007, 30 pp., W&M-M-159.
7. Best Buy 1996–2005, (authored by John S. Strong), 2005,
9 pp., W&M-M-158.
8. The Gap, 1999–2002 (authored by Larry Ring), 2005,
9 pp., W&M-M-156.
9. The Home Depot, 2000–2005 (authored by Larry Ring,
John Strong, and Yelena Shekhovtsova), 2005, 26 pp.,
W&M-M-154.
2
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Egypt, Oman, Saudi Arabia, and Bahrain. The company

Hennes and Mauritz
planned to open new stores in Russia, Egypt, and Israel
This case was prepared by Lawrence J. Ring,
during 2009 and 2010. Many investors were apprehensive
Chancellor Professor of Business and EMBA Alumni
of this massive expansion. In the 2008 H&M Annual
Professor, and Rachel Hutson, MBA 2009, as a basis
Report, CEO Rolf Eriksen responded to the current eco-
for class discussion. It is not intended to illustrate
nomic crisis by stating:
either effective or ineffective management.
“Historically, H&M has not been greatly impacted by eco-
Copyright 2009 by the Mason School of Business
nomic downturns, but of course the recession is affecting
Foundation Board
us. In the fourth quarter of the year most of our markets

In 2009, H&M’s business concept was to offer fashion were affected by consumption being more restrained,

and quality at the best price. i The firm specialized in fast although we continued to increase our market shares in

fashion. H&M’s in-house designers were encouraged to increasingly competitive markets. H&M stands strong and

interpret fashion trends, and create new fashions quickly we are focusing on the future. The economic situation is

that were accessible to all through the convenience of creating great opportunities that we are going to take, for

H&M’s many storefronts. The stores’ inventories were example in terms of access to new attractive commercial

revitalized daily to enable the company to keep up with locations and being in a strong position to negotiate. This

the pace of changing fashion trends. Quality was a central year we plan to open a net amount of 225 new stores

issue to H&M. The company had tester stores where new and recruit 6,000 to 7,000 new employees.” iii

products were tested before company-wide distribution

In 2009, H&M’s main competitor, Zara, also was on an
occurred. H&M prided itself on extensive Green and CSR
expansionary path. Zara, one of the companies owned by
policies. In order to keep costs down, all production was
global conglomerate Inditex, was one of the world’s largest
outsourced primarily to Asia and Europe. H&M did not own
international fashion companies. iv Also focusing on fast
any of its stores, but rather leased so it could vacate an
fashion and integrating cutting-edge design with manufac-
undesirable property if it decreased in popularity
turing and distribution, Zara was posed to compete with
over time.
H&M’s expansion goals. In order to compete in an untapped

Throughout the late 1990s and 2000s, H&M expanded H&M market, Inditex signed a joint deal with the Indian

rapidly. The company entered the United States market in conglomerate, Tata, to move Zara stores into India by

2000, and as of 2009 had 169 stores in the United States. 2010. v Globally, Zara and H&M were locked in a race

As of January 31, 2009, H&M had 1,741 stores in 33 to control the fast fashion market in 2009 and beyond.

countries. ii Exhibit 1 outlines where the company was Analysts were not sure who would win. Zara focused its

located as of November 2008. The company’s goal for efforts in major European and global cities, while H&M

the 2009 fiscal year was to expand the number of stores focused on geographic market saturation in fewer countries.

by 10 to 15 percent per year, while increasing sales in Zara designed, produced, and manufactured products in

existing stores. H&M planned to finance all of this Europe, while H&M outsourced all manufacturing to mostly

growth through reinvestment of company funds. Exhibits Asia. Both companies planned to expand in 2009 during

2 and 3 present the H&M income statement and balance an economic crisis. Would this be a good decision? Would

sheet. In 2008, the company opened an additional 216 the companies have to change their strategies? Who would

stores while expanding into new countries such as Japan, win the race for market share?

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EXHIBIT 1: H&M LOCATIONS DATAxxxii

No. Stores New Stores

as of 30 opened Closed 2008 Sales 2007 Sales Avg. No.
Market Year Est. Nov 2008 2008 Stores 2008 (USD m) (USD m) Employees % Male
Sweden 1947 150 29 3 $917 $890 4,924 21%
Norway 1964 85 4 1 $652 $635 1,575 7%
Denmark 1967 69 5 1 $476 $462 1,335 6%
UK 1976 146 20 3 $904 $902 4,275 24%
Switzerland 1978 66 7 1 $601 $518 1,599 12%
Germany 1980 339 25 5 $3,140 $2,729 10,746 19%
Netherlands 1989 96 8 1 $837 $757 2,395 19%
Belgium 1992 55 3 2 $385 $349 1,332 15%
Austria 1994 60 2 $618 $560 1,986 10%
Luxemburg 1996 9 1 $43 $41 134 11%
Finland 1997 36 3 1 $302 $277 840 10%
France 1998 114 16 $984 $859 3,396 25%
USA 2000 169 24 $802 $717 6,820 31%
Spain 2000 99 20 $712 $630 4,528 20%
Poland 2003 53 11 $309 $219 1,956 21%
Czech Republic 2003 16 2 $83 $75 281 6%
Portugal 2003 17 2 $94 $83 606 25%
Italy 2003 46 15 $330 $215 1,052 30%
Canada 2004 43 8 $223 $179 1,011 22%
Slovenia 2004 9 3 $73 $60 129 15%
Ireland 2005 9 2 $60 $51 220 15%
Hungary 2005 8 2 $37 $24 135 12%
Slovakia 2007 3 1 $17 $10 65 38%
Greece 2007 8 5 $37 $17 247 20%
China 2007 13 6 $109 $59 1,109 26%
Japan 2008 2 2 $24 203 33%
Franchise (1) 2006 18 8 $48 $32 N/A N/A
Total 1,738 234 18 $12,818 $11,350 52,899 19%

Fast Fashion Overview designs on an annual basis. Some designs resembled

The concept of fast fashion was pioneered by Zara. Fast the latest couture fashion trends while others were more

fashion’s central concept was to provide customers new classic in style. Fast-fashion retailers typically beat high-

products in limited supply at a constant rate. Customers fashion designers to the market due to their efficient

felt an exclusivity and impulse to buy products in fast- manufacturing and distribution channels. In addition, the

fashion stores because it was not guaranteed that the item products were less expensive because fast-fashion retailers

would remain on the shelves for long or that the company used less expensive fabrics and benefited from economies

would restock the item once it sold out. Fast-fashion of scale. The fast-fashion system depended on the strength

retailers created and distributed tens of thousands of new of the companies’ supply chains and tester stores.
Companies such as H&M and Zara tested small batches

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EXHIBIT 2: H&M INCOME STATEMENTxxxiii EXHIBIT 3: H&M BALANCE SHEETxxxiv

(In Millions USD) 2008 2007 2006 (In Millions USD)
Assets 2008 2007 2006
Sales including VAT 16,100 15,403 3,390
Fixed assets
Sales excluding VAT 13,700 13,099 11,436 Intangible fixed assets
Cost of Goods Sold (5,271) (5,099) (4,637) Brands 69
Customer Relationships 19
Gross Profit 8,429 8,000 6,799
Leasehold rights 102 44 37
Selling Expenses (4,973) (4,629) (4,008) Goodwill 67
Administrative Expenses (332) (297) (233) 256 44 37
Tangible fixed assets
Operating Profit 3,116 3,073 2,558
Buildings and land 74 78 70
Interest Income 164 133 86 Equipment, tools, fixtures, and fittings 1,851 1,475 1,193
Interest Expense (1) (1) (1) 1,925 1,553 1,263
Long-term receivables 74 42 26
Profit after financial items 3,279 3,205 2,643
Deferred tax receivables 201 148 17
Tax (912) (933) (838) Total fixed assets 2,456 1,787 1,343
Profit for the year 2,367 2,272 1,805 Current assets
Stock-in-trade 1,315 1,332 1,207
Full-time equivalent employees (2008) 53,430 Current receivables
Total Store Space (2008) 20.856 mm ft2 Accounts receivable 308 88 145
Other receivables 187 60 42

of new designs in tester stores and if the designs sold out, Prepaid expenses 147 106 94
641 353 280
more products were ordered and put into stores quickly.
Short-term investments 819 1,463
Fast fashion appealed to everyone from celebrities, fash- Liquid funds 3,517 2,686 1,651
ionistas, and bargain shoppers to Michelle Obama on the Total current assets 5,474 5,191 4,602

campaign trail. vi Total assets 7,930 6,978 5,945

Equity and liabilities
History Equity
Share Capital 32 35 35
H&M has had an ever-expanding presence in the retail
Reserves 218 44 4
industry. H&M began when Swedish founder Erling Persson
Retained earnings 3,101 3,015 2,801
visited the United States in 1947. During his trip, he Profit for the year 2,367 2,272 1,805
became interested in a different type of clothing store Total equity 5,718 5,366 4,645

that combined current fashion trends, high inventory Long-term liabilities

Provisions for pensions 35 26 22
turnover, and low prices. When he returned to Sweden,
Deferred tax liabilities 281 109 109
he opened the first Hennes (Swedish for “hers”) retail Other provisions 57
store on September 13, 1947. Persson began expanding 374 135 130
his women’s clothing store chain throughout the 1950s Current liabilities
Accounts payable 566 415 325
and 1960s. In 1968, Persson acquired Mauritz Widforss,
Tax liabilities 198 340 205
a hunting and gun store located in Stockholm, Sweden.
Other liabilities 504 245 261
After the acquisition he combined the new store’s stock Accrued expenses 571 476 380
of men’s clothes with his stock of women’s clothes and 1,838 1,477 1,170

changed the name to Hennes & Mauritz (H&M). vii Total liabilities 2,212 1,612 1,300
Total equity and liabilities 7,930 6,978 5,945

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Values and Culture
H&M was driven by its core values of teamwork, believing
in people, simplicity, salesmanship, fast-pace working,
cost-consciousness, constant improvements, and entrepre-
neurship. viii H&M had a strong culture built around its
expansive history and a strong desire to maintain the highest
standards of corporate responsibility. In order to foster
corporate responsibility, H&M compiled a CSR Report
on an annual basis. The company focused on supplier
working conditions, sustainable supply chain practices,
and cultural awareness.
Eriksen remarked, “H&M for me is a business based on
teamwork, humility and respect for people. At the same
time we are cost-conscious and have a competitive instinct
that makes us aim for constant improvements. We have
experienced fantastic growth, but we are always heading
toward the next challenge.” ix
Environmental Analysis
During the global economic recession of 2009, both H&M
and Zara decided to continue their global expansion. In
March 2009, The Wall Street Journal reported that Zara
posted strong sales gains that illustrated how low prices
and rapid response to fashion trends enabled it to
compete with Gap Inc. for highest global specialty apparel
retail sales. In contrast, Gap reported a drop in sales for
2008. Exhibit 4 compares total sales, profit, and margin
for the three leading global clothing retailers Gap, H&M,
and Zara. As Exhibit 4 illustrates, H&M and Zara saw
increasing sales from 2004 to 2007 while prior to the
recession Gap began to see flattening to decreasing sales.
During the recession, it seemed that retailers who special-
ized in low prices and efficient supply chains fared best.
In March 2009, Lars Olofsson, chief executive officer of
Carrefour, mentioned that “Ikea, Lidl, Wal-Mart, Tesco,
Zara, H&M—they have for the last 20, 30 years hammered
on the same nail every time.” x
In contrast to Zara, H&M seemed to be struggling in
March 2009. H&M reported a 12 percent drop in 2009
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first-quarter profits, and posted weak February 2009
results. xi Many analysts believed that this was a sign that
the fashion retailer was negatively impacted by the
economic slowdown. Two weeks prior to posting results,
H&M’s Eriksen said “with retail sales across the globe
plunging, many retailers face a bleak future. However,
H&M finds the low retail prices as an advantage in poor
economic conditions. I won’t say it [the crisis] will help us,
but we won’t be hurt so much. … We plan to open five
stores this spring in China, including two in Beijing, and
will open one more in the autumn.” xii Two weeks later,
after the first quarter results were posted, an H&M repre-
sentative was quoted in saying sales “were affected by
a continued restrained consumption due to the current
recession.” xiii Analysts believed that the results were worse
than expected due to rising costs, including expenses from
opening new stores as well as worse-than-expected
currency exposure. In February 2009, total sales rose
1 percent from February 2008; however, sales from stores
open for more than a year fell 8 percent signaling an
overall real decrease in sales. xiv Many questioned whether
H&M should consider slowing down its expansive growth.
However, H&M remained upbeat and stated that it
“remains positive toward future expansion and the
company’s business opportunities.” xv
H&M Strategy
In 2009, H&M employed a combination of strategies in
order to be one of the world’s leading clothing retailers
by sales. H&M’s collections were created by in-house
designers whose primary goal was to offer its customers
the latest fashion trends at the best price. H&M’s strategy
depended on keeping its prices low so that it could pass
on its cost savings to the end customer. In order to keep
prices low, H&M limited the number of middlemen in its
supply chain, bought in large volumes, outsourced its
manufacturing to low-cost areas of the world, had a
culture of cost-consciousness at all levels, and maintained
an efficient distribution system.
6
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EXHIBIT 4: COMPANY COMPARISON – SALES, NET INCOME, PROFIT MARGIN xli

H&M 2008 H&M 2007 H&M 2006 Inditex 2008 Inditex 2007 Inditex 2006 GAP 2008 GAP 2007 GAP 2006

Sales $13,700 $13,099 $11,436 $13,946 $12,800 $10,527 $14,526 $15,763 $15,923

GM% 61.5% 61.1% 59.5% 56.7% 56.2% 56.2% 37.5% 36.1% 35.5%

GM$ $8,429 $8,000 $6,799 $7,906 $7,195 $5,915 $5,447 $5,692 $5,657

Net Income $2,367 $2,272 $1,805 $1,848 $1,564 $1,254 $967 $833 $778

Pentagon Activities: Place Store Size, Layout and Design, and Sales Channels

Location
In 2009, H&M used three complementary sales channels:

The availability of attractive business locations was a stores, Internet, and catalogs. H&M believed that its most

significant determining factor when it came to where H&M important channel was its stores.

decided to expand. H&M analyzed population structure,

While in the stores, the customers could touch, see, and
economic growth, purchasing power, infrastructure, and
try on H&M’s latest designs. H&M prided itself on its elab-
political risk. H&M believed that being in the best place
orate display windows that showcased the merchandise
was critical to success. The company leased its store space
and drew customers into the stores. Its goal was to place
so that if a location did not turn out to be what it thought it
H&M stores in the best shopping districts in each city,
would be, it could relocate to a better location. It believed
whether the best location was a store on the main
that a store could easily be moved elsewhere if a city’s
shopping street or a shopping mall. The company prided
top location changed over time.
itself in having stores on Fifth Avenue in New York, Corso

Location was so important to H&M that it claimed it would Vittorio Emanuele in Milan, Regent Street in London, and

rather wait until the right storefront was available instead Queen’s Road in Hong Kong. Recently, the group was

of accepting a second choice. H&M focused its analysis on raising the standard of its stores and developing new con-

the local customer base, competition within the area, and cepts for store interiors. Its flagship stores were increas-

customer traffic flow. It also looked at the possibility of ingly inspirational design experience for its customers.

targeting different stores to different customer bases.

H&M used a variety of different types and sizes of stores
Some locations were more attractive to teenagers while
depending on the location. It had large stores that offered
other locations were more attractive to families. H&M
a full range of merchandise to smaller concept stores that
believed that choosing the right combination of location
offered a limited line of merchandise. The store size varied
factors to suit the market was the best strategy.
from 2,000 square feet to more than 30,000 square

In addition to looking at a wide variety of location factors, feet. xvi Sources estimated that H&M achieved more than

H&M believed that controlled growth while maintaining $600 of sales per square foot of gross leasable space.

profitability was a central strategic issue. From 2002 to

Nordic H&M customers had been able to shop from home
2007, H&M expanded rapidly; all of this expansion was
for more than 25 years. Initially shopping from home was
internally financed.
done through H&M catalogs, but, starting in 1998, H&M
offered Internet shopping as well. In 2006, H&M expanded
the shopping from home option to non-Nordic customers.

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Although Internet sales were increasing more than catalog
sales, H&M executives believed that catalogs remained an
important part of its sales strategy. The company pub-
lished four catalogs per year: two for fall and two for
spring. Each catalog had a different theme and highlighted
seasonal changes and fashion trends. Catalogs were sent
out at the beginning of each season and created interest
in the new collection. Most merchandise offered in the
catalogs also was available in stores. The catalogs gave the
customers an overview of the entire season’s collection
as well as fashion tips and ideas for the coming season.
Catalogs offered a way for H&M to stay personally
connected to its customer base.
Product
Merchandise Intensity and Assortment
H&M was known to operate its stores at a very high level
of merchandise intensity, particularly as related to arch
competitor, Zara. The company also carried relatively
broad assortments. At any given time, H&M was working
on several trend directions at once. According to company
sources, one trend is always tailored, one sporty, one
ethnic, one romantic, and one futuristic. Each trend could
be found in every department—women, men, young, and
children. H&M prided itself on its constantly changing
range of products. The H&M design team also focused on
what was popular during the previous season and where.
Customer demand in different markets and stores deter-
mined the merchandise assortment for an area of the
world, or store in general. The size and location of a store
factored into what merchandise would be shipped to that
store. High fashion, limited quantity garments were
typically distributed to larger stores in big cities while basic
items that generally reflected the style of the season were
shipped to many different stores.
H&M stores were known for being packed full of pieces of
the latest fashion. Most major stores were restocked daily.
H&M fans knew that the store displayed two of every size
each day. If a size was not available, then the customer
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had a good chance of it being available the next day. This
created the sense of the need to go to the H&M store on
a regular basis to find the best deals. One loyal customer
stated that “I’m an H&M bulimic. … 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.”xvii
Designs
H&M worked to create a balance between fashion, quality,
and low price. H&M had a culture of teamwork in which
the designers, pattern makers, and buyers created the
collections together. Designers monitored the world, and
drew inspiration from street and runway fashion, films,
and history. Designs and styles were centered on a unique
combination of trendy, fashionable pieces as well as basic
classic pieces. The overall theme and most pieces for
a collection were planned up to a year in advance while
H&M’s trendiest clothing was picked up on short notice. xviii
Each H&M collection was planned, designed, and created
at the H&M headquarters in Stockholm by more than 100
staff designers and many guest designers. H&M believed
that understanding what customers wanted was paramount
to its success. It created the “Idea to Store” concept, in
which the desires of the end customer were the key
focus throughout the entire design process. The designers
offered different concepts for different customers. H&M
served men, women, and children of all ages who had
different fashion preferences. The designers adapted
global influences and trends to styles and clothing cuts
that fit the diverse needs of its customers. Colors, quality,
themes, silhouettes, and certain types of garments
combined together to create each season’s collection.
Value
Price
H&M believed it achieved the “best price” by having
few middlemen, buying in large volumes, purchasing the
right product from the right market, being cost-conscious
in every part of the organization and having efficient
distribution processes.
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Quality
“There’s no contradiction in H&M’s business concept of
offering fashion and quality at the best price,” says Tomas
Persson, H&M director of quality control. “It’s an equation
that has to add up. Quality is extremely important. The
customers have to get value for their money. For the
customer to feel satisfied with a product, it not only has
to be fashionable, it has to be durable and work the way
it’s supposed to. It should be safe and stand up to fairly
rough use.” Persson and his colleagues put together the
guidelines and standards manufacturers have to follow.
At every production office, there are quality teams that
monitor compliance. The guidelines exist to ensure that
all H&M products live up to the toughest standards.
“Quality work is a living process that is constantly devel-
oping. The goal is to make our products durable, easy to
use, practical, and safe.” xix
People
H&M believed that its employees were its most valuable
asset. In fiscal year 2007, H&M employed approximately
68,000 employees. The average number translated into
full-time jobs was 47,029. xx Exhibit 1 lists H&M’s markets
as of 2008 and each market’s number of employees and
gender. Worldwide, 80 percent of H&M employees were
women; among employees with a position of responsi-
bility, 76 percent were women. xxi H&M’s employment
concept included growing with the company, career
development through a variety of ways, internal recruit-
ment, and improving through partnerships.
H&M believed that the opportunity for personal growth
created an attractive workplace. It believed that each
employee had the ability to use common sense, assume
responsibility, and assume individual initiatives. These
three qualities created the “H&M Spirit.” xxii H&M encour-
aged continued education and offered courses with an
emphasis on skill development.
The company developed its employees’ careers through
job rotations. By rotating through customer service, the
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cash register, the stockroom, the fitting room, merchandise
presentation, and promotions, employees were given the
opportunity to learn about the entire sales process. Job
rotations encouraged recruitment from within. In order to
ensure consistent service levels, H&M trained employees of
new stores in new countries by sending the management
teams to train with established H&M stores. Nevertheless,
service in most H&M stores could be described as
essentially “self-service.”
Eriksen commented, “At H&M we share the same goals at
the same time as we minimize bureaucracy and focus on
the individual. We delegate a lot of responsibility to local
markets, stores, and individual people—and we encourage
people to take their own initiatives at all levels.” xxiii
The H&M Annual Report featured comments by several
sales associates and store managers regarding their jobs: xxiv
First Associate. How did you first come in contact with
H&M? “Through H&M’s website. I had been looking at the
website ever since I heard H&M was coming to Japan.” Why
did you apply for a job here? “H&M believes in people, and
after I heard about H&M’s values, I was very interested in
working here.” How did you learn to do your job? “We spent
five days in a classroom in Tokyo learning about H&M’s
history, values, clothing presentation, and much more.”
What’s the best thing about working at H&M? “Teamwork,
I would have to say. I respect all of my colleagues, and
my supervisor is fantastic.”
Second Associate. How did you first come in contact
with H&M? “I grew up with H&M. It was always my first
choice.” Why do you want to work with fashion? “Because it’s
a fantastic way of expressing your personality.” What do
you expect from your job? “I hope I can put my creativity
in the service of my colleagues and gain new ideas from
them and the customers. I would like to see everybody
leave the store with a smile on their face.” How did you
learn to do your job? “The introduction was intense—there
was really a lot to learn! Everybody on the team helped
out and provided support and people told me they
appreciated my ideas.”
9

Third Associate. What are you expecting of your job?
“A wonderful team that makes it fun to work. It’s exciting to
meet so many different kinds of customers, too. And then
there are the development opportunities for me and the
team.” How did you learn to do your job? “I felt welcome,
even though there was a lot to learn; I could always count
on help from my colleagues. During the first few weeks,
there was one colleague in particular who helped me with
everything.” What’s the best thing about working at H&M?
“The team and the many opportunities to develop and
take on new challenges. It is really fun to try new things
and meet so many different kinds of people every day.”
First Manager. What is a typical day at work like for you?
“The day begins with deliveries. Then, I review the goals
for the day for every department with all the floor managers.
After that, I spend most of the day out in the store,
because I believe in symbolic leadership, but also in order
to meet our customers.” What is special about the store
where you work? “We have a fantastic atmosphere, are
very structured and professional yet have a lot of fun. The
employees are very committed.” What’s the best thing
about working at H&M? “The people and the possibilities.
H&M is a workplace where you can achieve your full
potential.” How do you inspire your colleagues’ enthu-
siasm? “By being a good example. I love working at H&M,
and I’m passionately dedicated to my work. I believe that
makes me a role model. I also try to inspire the team to
be creative, take responsibility and develop.” What is the
biggest challenge for a store manager? “Keeping a cool
head amidst everything that’s happening. I have to main-
tain a consistent, professional attitude toward employees
and customers even if I’m having a bad day.”
Second Manager. What is a typical day at work like for
you? “We start the day with a review of our turnover and
other sales figures. After that, I have brief conversations
with all the assistant managers. I feel it’s important to stay
in close contact with my colleagues and I make time to do
so. I have a look at the store floor and displays; they have
to look neat and tidy, and there has to be enough clothing
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on the shelves and in the display areas. Finally, I check
to make sure the signage is inviting and inspiring. At
lunchtime, we meet again to discuss the priorities for the
afternoon. After that, we continue to focus on customers
and sales.” What is special about the store where you
work? “Our fantastic team. Even though there are a lot of
us, it feels like a big family, and that’s what makes work
fun.” What’s the best thing about working at H&M? “Every
day is a new challenge, so it’s never boring, and there are
many opportunities to develop and take on new responsi-
bilities.” How do you inspire your colleagues? “By working
with the team and maintaining open communications, and
by taking part and providing support.”
Communications and Brand
H&M believed that part of its competitive advantage was
its strong brand. It promoted its brand through stores,
magazines, catalogs, public relations (PR) activities, events,
designer collaborations, collections, and fashion shows.
The company maintained its brand through making fashion
available for everyone, icon and designer collaborations,
and using the same message worldwide. The company’s
underlining goal was to have each activity promote its
brand and concept of “fashion and quality at the
best price.”
Store openings were paramount to promoting the H&M
brand throughout the world. For example, in April 2009,
H&M launched its first store in Beijing, China. The brand
new store was located in a newly developed shopping
area in the center of the cultural capital. To celebrate the
opening, H&M planned an elaborate event that entailed
the gathering of Beijing’s celebrities, fashion crowd, and
media. The first experience of the H&M store left a strong
impression among the guests, who dressed their personal-
ities in H&M’s various party styles to glamorize the
event. xxv By making fashion available to everyone, H&M
became the store for the everyday fashion-conscious
consumer. New merchandise arrived daily at each store.
Flashy, fun marketing campaigns were launched frequently.
10

The store and its window displays were H&M’s most
important channel of communication with customers,
and the right design was particularly important. Every two
or three years, H&M created a brand new interior design
program for a large number of stores based on one new,
special store in an interesting market. “Simple, smart, and
sustainable” were the keywords for the latest store design
update, which was to be rolled out in 2009. xxvi
H&M also collaborated with celebrities and iconic
designers to strengthen its brand position. In spring 2009,
H&M collaborated with designer Matthew Williamson.
Williamson debuted his exclusive H&M collection at the
first Beijing store opening in April of that year. His collec-
tion included iconic pieces from his past collections com-
bined with new trendy, colorful pieces. This line was
available exclusively at H&M stores worldwide. One of
H&M’s most popular celebrity campaigns was in spring
2007 when it partnered with style icon and mega super-
star Madonna to promote its line of clothing. By partnering
with celebrities and designers, H&M added legitimacy to
its concept and message of fashionable clothing for all.
Triangle Activities
Operations
H&M outsourced the majority of its manufacturing to com-
panies primarily in Asia and Eastern Europe. In 2009, H&M
did not own a factory. The company bought its products
from 700 independent suppliers throughout the world. xxvii
H&M prided itself on its corporate social responsibility
(CSR) and tasked its purchasing department with verifying
that each supplier lived up to H&M’s CSR requirements.
The purchasing department used six factors to determine
whether to do business with that supplier. Quality, price,
capacity, lead time, flexibility, and living up to H&M’s CSR
requirements were the determining factors when choosing
a supplier. The production of all supplier products had to
take place under satisfactory conditions. H&M maintained
more than 20 production offices in Europe, Asia, and
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Africa to mediate contact between the internal buying
department and the independent suppliers. These offices
also identified new suppliers and negotiated contracts
with them.
Purchasing flexibility was central to the Hennes & Mauritz
strategy. The pattern of seasonal flexibility that applies
to many retail fashion stores was changed at H&M in
the 1960s. Instead, buyers started to purchase 12 times
a year, making rapid switches of fashion possible. In their
cultural perception, management perceived the company
as being very informal in terms of decision-making
processes. The director of development said,
“We know from previous experience that decision making
is based 90 percent on feeling and 10 percent on history.”
Nevertheless, company tactics were extremely visible to
employees. The first CEO introduced “takten” (the pace),
an instrument that still remains in place and now sup-
ported by information and communications technology
(ICT). This was a visible list that arrived weekly; showing
each buyer how much has been sold in the stores of each
particular product. Everyone understood the risks involved
in falling short, and, according to several sources, the
saying “shape up or ship out” was always present in
the background.
Supplier lead times varied from a few weeks to six
months. Optimal lead times varied as well. Fast-fashion
garments had the shortest lead time and smallest volume
while high-volume fashion basics and children’s clothing
had longer lead times. In its case, H&M could go from
design concept to hanger in the store in 20 days—nearly
as good as Zara—and probably 30 percent less expensive.
Gap’s minimum turnaround was three months.
All stores needed to have the most crucial goods on stock
at all times. Furthermore, the central logistics department
needed to follow the sales progress of individual goods in
order to avoid overproduction of goods which could not
be sold. In order to do this, the procurement staff worked
11

closely with the production offices, and ICT was a crucial
tool used to follow sales and make intelligent choices.
A benefit of owning the stores was that they shared a
common ICT platform where all sales were reported. Thus,
the procurement and logistics employees could keep track
of sales and stock status (at individual stores as well as at
the central warehouse).
From idea to store, H&M controlled every link in its supply
chain. Most of its products were shipped by boat. The
company used trains, trucks, and planes to transport
products. This flexibility resulted in a more efficient system
than those of its individual suppliers. The company also
used an information technology (IT) system to record and
produce rapid feedback about the popularity of certain
items and individual store results on a daily basis. This
system helped the purchasing and distribution teams
know what items needed to be shipped where.
Once the goods were manufactured, they were shipped
using H&M external contract companies, generally to the
company’s central warehouse in Hamburg. However,
shipping also could be to the national offices (if the
goods were country specific), or directly to the store if
the quantities were large enough. This transaction model
is depicted in the diagram (Figure 1). xxviii H&M chose
the most appropriate transportation method for each
Figure 1: H&M Transaction Model xxix
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shipment. It used a combination of factors including time
and environmental impact. It preferred to ship products
by train. It preferred to ship efficiently with high utilization
rates and ship directly to the sales country. After the
merchandise was received and checked it was either
distributed directly to the store or to a central restocking
warehouse. Store shelves were replenished based on
individual item and store demand.
The individual stores did not have backup stocks; they
were replenished as required from central stockrooms.
As soon as a product was sold a request was sent for
replenishment. Every day, the H&M stores received
new goods.
The most significant triangle challenges for Hennes &
Mauritz were thought to be (1) continuous expansion;
(2) cost-efficient production and logistics; and
(3) reduction of lead times.
Competition
Gap Inc.
Gap historically was a strong competitor in the fashion
industry. Exhibit 5 illustrates Gap Inc.’s annual sales from
1999–2008. As the chart shows, Gap maxed out its
annual revenue at approximately $16.3 million in sales
per year in 2004. In 2007, Gap had 3,100 stores in six
12

countries. The retailer had seen little store growth in five
years. In 2008, H&M had $13.8 million in sales (excluding
valued added tax) and planned to open at least 225
stores in 2009. Many analysts believed that H&M was
on the same expansionary path that Gap was on in the
late 1990s.
Analysts believed that Gap’s demise was due to the fact
that it lost sight of its target customer. Instead of following
the trend toward fast fashion and best price, Gap con-
tinued to offer basic pieces at higher price levels. Even its
other stores, such as Old Navy and Banana Republic, were
scrutinized for forgetting their respective target markets.
Gap’s loss of customers resulted in major financial implica-
tions for the company. As Exhibits 4 and 6 indicate,
Gap was the world leader in annual sales in 2008; how-
ever, both its profit margin and net income were lower
than Inditex and H&M’s. In addition, Gap’s productivity was
significantly lower than H&M and Inditex, and had dropped
significantly during the decade as shown in Exhibit 7.
Some past Gap consumers were lured away from the retail
giant by H&M and Zara’s trendy, fashionable clothing at
lower prices. (See Exhibits 8 and 9 for Gap Inc.’s Income
Statement and Balance Sheet.)
Zara
Zara, owned by retail conglomerate Inditex, was H&M’s
primary competitor. Zara was Inditex’s original concept
store. It was famous for its concept of idea to in the stores
in two weeks. Zara boasted that it was able to generate a
new clothing idea, design, manufacture, and ship the idea
to its stores within two weeks. This two-week lead time
created a strong competitive advantage for the company.
Zara was known for its open communication with con-
sumers, innovative ideas and inventory policies, and
equipping its stores with IT systems that enabled man-
agers to report emerging trends to headquarters. These
strong lines of communication allowed Zara to claim that it
was “in step with society.” xxx It became a popular shopping
destination for the fashion-conscious consumer. The com-
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EXHIBIT 5: HISTORICAL GAP DATAxxxvii
Gap Inc. Revenue 1999–2008
17,000
16,000
15,000
14,000
13,000
12,000
11,000
10,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
pany relied on ever-evolving fashion trends to increase
inventory turnover throughout the stores. Zara was known
for ordering small batches of items that would not be
reordered once sold out. This practice created a sense of
urgency for customers to visit Zara stores frequently and
buy immediately. This was one of Zara’s strongest, most
important competitive advantages. (See Exhibits 10 and
11 for Inditex’s Income Statement and Balance Sheet.)
Looking Ahead
In 2009, Zara and H&M were locked in a tight race to
become the top fast-fashion retailer in the world. Each
company believed that if it could saturate the fast-fashion
market it would beat Gap Inc. in global retail sales. Gap
had grown rapidly in the late 1990s but began to falter
in early 2000s. Company sales had peaked at around
$17 billion in annual sales and begun to decline. Many
analysts believed that H&M and Zara needed to slow down
their expansion plans and refocus on their core competences.
First-quarter sales results in 2009 revealed that Zara was
doing well through the global economic recession while
H&M and Gap Inc. were not. Would Zara be able to con-
tinue to increase sales faster than H&M? Would H&M’s
slower lead time end up being its Achilles’ heel? Would
expansion during a recession be considered a stroke of
genius or a financial blow to H&M? Who would win the
race to become the top global specialty apparel retailer?
H&M’s Eriksen was concerned that “When we expand into
new markets it’s important that we do not lose sight of
13
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EXHIBIT 6: COMPANY COMPARISON – RETURN ON NET WORTHxl

COMPANY ROS ATO ROA LEV RONW

Strategic Profit Models for
H&M 2008 17.28% 1.73 29.86% 1.39 41.41%
Selected Retailers by L. J. Ring
H&M 2007 17.34% 1.88 32.56% 1.30 42.34%

H&M 2006 15.78% 1.92 30.36% 1.28 38.86%

Inditex 2008 13.25% 1.33 17.59% 1.68 29.64%

Inditex 2007 12.22% 1.43 17.44% 1.65 28.86%

Inditex 2006 11.91% 1.30 15.43% 1.78 27.49%

Gap 2008 6.66% 1.92 12.78% 1.72 22.04%

Gap 2007 5.28% 2.01 10.63% 1.83 19.49%

Gap 2006 4.89% 1.86 9.11% 1.65 15.04%

EXHIBIT 7: STRATEGIC RESOURCE MODEL FOR 2000 VERSUS 2008xlii

H&M 2008 H&M 2000 Inditex 2008 Inditex 2000 GAP 2008 GAP 2000
Derived by casewriter from
Gross Margin 61.5% 50.6% 56.7% 50.5% 37.1% 37.5%
case exhibits
SI Index 10.43 6.84 9.37 10.67 9.65 7.18

GMROI 6.41 3.46 5.31 5.39 3.62 2.66

Merch Intensity $63 $70 $63 $39 $38 $61

Sales/Ft2 $657 $482 $591 $419 $368 $435

GMROF $404 $243 $335 $212 $138 $162

Service Intensity 390 302 384 317 590 263

Sales/FTE $256,000 $145,000 $227,000 $133,000 $217,000 $114,000

GMROL $157,000 $73,000 $129,000 $67,000 $81,000 $42,000

EXHIBIT 8: GAP INCOME STATEMENTxxxviii

(In Millions USD)

except for per share items FY 08 FY 07 FY 06 FY 05
Full-time equivalent employees (2008) 67,000
Total Revenue 14,526 15,763 15,923 16,019 Total store space (2008) 39.5 mm ft2

Cost of Revenue, Total 9,079 10,071 10,266 10,145 “Gap (GPS)”. www.google.com/finance

Gross Profit 5,447 5,692 5,657 5,874

Total Operating Expense 12,942 14,357 14,608 14,196

Operating Income 1,584 1,406 1,315 1,823

Income Before Tax 1,584 1,406 1,315 1,823

Income After Tax 967 867 809 1,131

Net Income Before Extra Items 967 867 809 1,131

Net Income 967 833 778 1,113

B A B S O N E X E C U T I V E E D U C AT I O N R E TA I L I N G N E W S L E T T E R 14
 HENNES AND MAURITZ

our core values.” He concluded, “We also EXHIBIT 9: GAP BALANCE SHEETxxxix

need to manage all of the components that (In Millions USD)

except for per share items FY 08 FY 07 FY 06 FY 05
H&M consists of in an effective way and
Cash and Equivalents 1,715 1,724 2,030 2,035
ensure that our core values are upheld in all
Short-Term Investments 0 177 570 952
parts of our organization regardless of country
Cash and Short-Term Investments 1,715 1,901 2,600 2,987
or cultural differences. 2009 will be an
Accounts Receivable – Trade, Net - - - -
exciting and intense year with new stores,
Receivables – Other - - - -
new markets, and new products for our cus-
Total Receivables, Net - - - -
tomers, and above all, new opportunities.” xxxi
Total Inventory 1,506 1,575 1,796 1,696

Prepaid Expenses - - - -

Other Current Assets, Total 784 610 633 556

Total Current Assets 4,005 4,086 5,029 5,239

Property/Plant/Equipment, Total – Gross - 7,320 7,135 6,958

Goodwill, Net - - - -

Intangibles, Net - - - -

Long-Term Investments - - - -

Other Long-Term Assets, Total 626 485 318 336

Total Assets 7,564 7,838 8,544 8,821

Accounts Payable 975 1,006 772 1,132

Accrued Expenses 1,076 1,259 1,159 725

Notes Payable/Short-Term Debt - 0 0 0

Current Port of LT Debt/Capital Leases 50 138 325 0

Other Current Liabilities, Total 57 30 16 85

Total Current Liabilities 2,158 2,433 2,272 1,942

Long-Term Debt 0 50 188 513

Capital Lease Obligations - - - -

Total Long-Term Debt 0 50 188 513

Total Debt 50 88 513 513

Deferred Income Tax - - - -

Minority Interest - - - -

Other Liabilities, Total 1,019 1,081 910 941

Total Liabilities 3,177 3,564 3,370 3,396

Redeemable Preferred Stock, Total - - - -

Preferred Stock – Non Redeemable, Net - - - -

Common Stock, Total - 55 55 54

Additional Paid-In Capital - 2,783 2,631 2,402

Retained Earnings (Accumulated Deficit) - 9,223 8,646 8,133

Treasury Stock – Common - -7,912 -6,235 -5,210

Other Equity – Total 4,387 125 77 46

Total Equity 4,387 4,274 5,174 5,425

Total Liabilities and Shareholders’ Equity 7,564 7,838 8,544 8,821

B A B S O N E X E C U T I V E E D U C AT I O N R E TA I L I N G N E W S L E T T E R 15
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EXHIBIT 10: INDITEX INCOME STATEMENTxxxv EXHIBIT 11: INDITEX BALANCE SHEETxxxvi
(In Millions USD) 2007 2006 2005 (In Millions USD) 1/31/2008 1/31/2007 1/31/2006
Assets
Net sales 13,946 12,800 10,527
Current Assets 4,407 3,355 3,196
Cost of merchandise (6,040) (5,605) (4,612)
Cash and cash equivalents 2,167 1,415 1,544
Gross profit 7,906 7,195 5,915
Receivables 685 568 511
Operating expenses (4,769) (4,373) (3,587)
Inventories 1,489 1,287 1,069
Other net operating expenses
and income (39) (27) (49) Income tax receivable 3 33 48

EBITDA 3,176 2,795 2,279 Other current assets 64 53 25

Amortization and depreciation (734) (677) (571) Noncurrent assets 6,096 5,612 4,929
EBIT 2,442 2,118 1,708 Property, plant, and equipment 4,704 4,355 3,764
Financial results 1 (22) 13
Investment property 14 19 22
Equity accounting losses (11) (4) (0)
Rights over leased assets 746 709 641
Income before taxes 2,433 2,092 1,720
Other intangible assets 20 24 14
Income tax (573) (515) (454)
Goodwill 186 155 124
Net income 1,859 1,577 1,266
Financial investments 53 52 95
Minorities 11 13 12
Investments in associates – 7 11
Net income attributable
to the parent 1,848 1,564 1,254 Deferred tax assets 197 139 121

Other 177 153 136

Full-time equivalent employees (2008) 61,487
Total store space (2008) 23.590 mm ft2 Total assets 10,503 8,968 8,125

Liabilities – – –
Inditex 2007 Annual Report
Current liabilities 3,634 2,943 2,890

Trade and other payables 2,920 2,528 2,357

Financial debt 549 227 327

Income tax payable 165 189 206

Noncurrent liabilities 636 604 673

Financial debt 63 74 119

Deferred tax liabilities 164 163 167

Provisions 70 70 66

Other noncurrent liabilities 339 297 322

Net equity 6,234 5,420 4,562

Net equity attributable to the parent 6,198 5,385 4,527

Net equity attributable

to minority interest 35 35 34

Total Liabilities and Equity 10,503 8,968 8,125

B A B S O N E X E C U T I V E E D U C AT I O N R E TA I L I N G N E W S L E T T E R 16

i2008 Annual Report.
http://www.hm.com/filearea/corporate/fileobjects/pdf/en/
ANNUAL_REPORT_ARCHIVE2008__ITEM_3_1237462089192.pdf.
March 23, 2009.
ii“H&M Group Sales Development in January.”
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financialreports/salesdevelopment/financepressrelease.
ahtml?pressreleaseid=409569&nodeid=563.
February 16, 2009.
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ivwww.zara.com
v“Inditex and Trent of the Tata Group agree to open stores
in India beginning 2010.”
http://www.inditex.com/en/press/press_releases/extend/00
000689. February 25, 2009.
vi“Michelle Obama Endorses Fast Fashion”
http://www.blackbookmag.com/article/michelle-obama-
endorses-fast-fashion/4333. October 1, 2008.
vii“Facts About H&M.”
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ENGLISH_US_1209368513139.pdf. March 17, 2009.
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xRohwedder, Cecilie. “Zara Grows as Retail Rivals Struggle.”
The Wall Street Journal. March 26, 2009.
xiKinnander, Ola. “H&M’s Earnings Fall 12%, Missing
Expectations.” The Wall Street Journal. March 27, 2009.
xii“H&M to Open 5 Stores in China Soon.” Indian Retailing
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xiiiKinnander, Ola. “H&M’s Earnings Fall 12%, Missing
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xivKinnander, Ola. “H&M’s Earnings Fall 12%, Missing
Expectations.” The Wall Street Journal. March 27, 2009.
xvKinnander, Ola. “H&M’s Earnings Fall 12%, Missing
Expectations.” The Wall Street Journal. March 27, 2009.
xvi“Facts About H&M.”
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ENGLISH_US_1209368513139.pdf. March 17, 2009.
xvii“Inside the H&M Fashion Machine.” Time magazine.
Monday, February 9, 2004.
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inside_the_h_m_fashion_01_print.html. May 11, 2009.
xviii“Idea and Design.”
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ore/ideaanddesign__fromideatostoreideaanddesign.nhtml.
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xx“Facts About H&M.”
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xxii“Facts About H&M.”
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ENGLISH_US_1209368513139.pdf. March 17, 2009.
xxiiihttp://www.hm.com/filearea/corporate/fileobjects/pdf/en/
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xxv“H&M Finally Lands in Beijing, China.”
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mauritz-group/newsdetails.aspx?News_id=71794. April 25, 2009.
17
 HENNES AND MAURITZ

xxvihttp://www.hm.com/filearea/corporate/fileobjects/pdf/en/

ANNUAL_REPORT_ARCHIVE2008__ITEM_3_1237462089192.pdf

xxvii“Facts About H&M.”

http://www.hm.com/filearea/corporate/fileobjects/pdf/en/
RM_DOWNLOAD_FACTSANDHISTORY_FACTSABOUTHM_PDF_
ENGLISH_US_1209368513139.pdf. March 17, 2009.

xxviiihttp://www.eurofound.europa.eu/emcc/publications/200

4/ef0465en_1.pdf

xxixhttp://www.eurofound.europa.eu/emcc/publications/2004

/ef0465en_1.pdf

xxxGalloway, Elizabeth. “Zara in 2007.” Mason School of

Business. 2008.

xxxiH&M 2008 Annual Report.

http://www.hm.com/filearea/corporate/fileobjects/pdf/en/
ANNUAL_REPORT_ARCHIVE2008__ITEM_3_1237462089192.pdf.
March 23, 2009.

xxxiiH&M 2008 Annual Report.

http://www.hm.com/filearea/corporate/fileobjects/pdf/en/
ANNUAL_REPORT_ARCHIVE2008__ITEM_3_1237462089192.pdf.
March 23, 2009.

xxxiiiH&M 2008 Annual Report.

http://www.hm.com/filearea/corporate/fileobjects/pdf/en/
ANNUAL_REPORT_ARCHIVE2008__ITEM_3_1237462089192.pdf.
March 23, 2009.

xxxivH&M 2008 Annual Report.

http://www.hm.com/filearea/corporate/fileobjects/pdf/en/
ANNUAL_REPORT_ARCHIVE2008__ITEM_3_1237462089192.pdf.
March 23, 2009.

xxxvInditex 2007 Annual Report

xxxviInditex 2007 Annual Report

xxxviiGap Inc. – 10 Year Summary.

http://moneycentral.msn.com/investor/invsub/results/statem
nt.aspx?Symbol=gps&lstStatement=10YearSummary&stmtVie
w=Ann. April 27, 2009.

xxxviii“Gap (GPS).” www.google.com/finance

xxxix“Gap (GPS).” www.google.com/finance

xlStrategic Profit Models for Selected Retailers by L. J. Ring

xliDerived by casewriter from case exhibits

xliiDerived by casewriter from case exhibits

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Fax: +781-239-5266 The College of William and Mary
E-mail: exec@babson.edu larry.ring@mason.wm.edu
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Eddie Tritton
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Mt. Eliza Executive Education
Melbourne Business School
e.tritton@mbs.edu

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