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Annual Report 2008 Is Divided Into Two Parts; H&M in Words and Pictures 2008 and H&M in Figures 2008 Including the Annual Accounts and Consolidated Accounts

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Annual Report 2008 Is Divided Into Two Parts; H&M in Words and Pictures 2008 and H&M in Figures 2008 Including the Annual Accounts and Consolidated Accounts PART I. H&M IN WORDS AND PICTURES 2008 DRESS € 19.90 www.hm.com ︵ „НОВОСТЬ О 『 タ 原 ス 小 ТОМ, ЧТО H&M イ НАКОНЕЦ ム 宿 タ 売 ОТКРЫВАЕТ 』 に ー の МАГАЗИНЫ 誌 В РОССИИ, ︶ 進 、 ロ ВСЕХ ОЧЕНЬ 出 ッ ОБРАДОВАЛА“ 。 ク ДНИ.РУ / Стиль ”A RETAIL ROCK STAR ON ITS WAY TO HARAJUKU” – Time ”EVERYONE IS SO EXCITED AFTER THE NEWS THAT H&M FINALLY OPENS STORES IN RUSSIA” – DNI Style H&M 2008 – page 3 CONTENTS PART I H&M IN WORDS AND PICTURES 2008 Pages 6 – 7 CEO INTERVIEW Rolf Eriksen, CEO of H&M, looks back on an exciting year. Pages 8 – 9 H&M 2008 IN BRIEF New concepts, stores, projects and collections – this happened in the past year. Pages 10 – 13 BUSINESS CONCEPT, GOALS AND STRATEGY H&M’s business concept is simple: providing fashion and quality at the best price. Pages 14 – 15 H&M 2008 IN FIGURES Financial information, key ratios and company history. Pages 16 – 19 OUR COLLECTIONS During the year, technical materials and organic cotton made dramatic progress. Pages 20 – 21 MARKETS H&M stores opened in five new markets. H&M now has a presence in 33 countries. Pages 22 – 23 H&M IN THE US Country Manager Sanna Lindberg on our continuing expansion in the US. Pages 24 – 29 STORES AND OPENINGS In autumn 2008, H&M finally came to Japan. Pages 30 – 33 DESIGN In the design department, trends turn into fashions, available to all. New Head of Design Ann-Sofie Johansson explains how. Pages 34 – 36 OUR PEOPLE Committed employees are one of the keys to H&M’s success. Pages 37 – 41 OUR RESPONSIBILITY Ingrid Schullström, Tobias Fischer and Tomas Persson discuss CSR, the environment and quality. Page 42 CONTACT DETAILS PART II H&M IN FIGURES 2008 including the Annual Accounts and Consolidated Accounts The H&M Annual Report for 2008 consists of two parts: Part I H&M in words and pictures 2008 and Part II H&M in figures 2008 including the Annual Accounts and Consolidated Accounts. H&M 2008 – page 4 29 16 24 10 30 34 37 16 H&M 2008 – page 5 CEO INTERVIEW Rolf Eriksen, CEO of H&M, looks back on the past year. 2008 was an intense and exciting year for H&M in a challenging economic climate. Our customers purchased fashion and quality at the best price for more than SEK 100 billion in stores from San Francisco in the West to Tokyo in the East, as well as through Internet and catalogue sales. H&M 2008 – page 6 CEO INTERVIEW oday H&M is a company with over 1,700 stores in enormous potential, and in 2010 the first H&M store will open 33 countries. Our business concept – fashion and in St. Petersburg. Meanwhile, our franchise partnerships in the quality at the best price – works globally and there Middle East are being increased with stores planned in Lebanon are still many new markets for H&M to enter into in in 2009 and Israel in 2010.” the future. Despite the economic downturn, 2008 H&M is always trying to surprise its customers. Over the past Twas still a strong year for H&M. few years there have been several designer collaborations, starting “Taking into account the current economic climate, we are in 2004 with Karl Lagerfeld, Comme des Garçons this past happy with a result that shows satisfactory sales and strong autumn and this spring it is Matthew Williamson’s turn. profitability. Our sales passed the milestone of SEK 100 billion What have designer collaborations meant for H&M? including VAT, our gross margin was 61.5 percent and our profit “They have been very successful, both because our customers after financial items increased by 11 percent to SEK 21.2 billion.” have appreciated them and because fashion designers have been Internet and catalogue sales developed very well during the able to reach out to a broader audience – a win-win situation. For year; in Germany and Austria catalogue sales were added to us, they show the strength of our business concept – that fashion Internet sales – a move that was well received. and design are not a matter of price. We make fashion available to everyone and we give the customer a fashion experience that How is the recession affecting H&M? strengthens the H&M brand.” “Historically, H&M has not been greatly impacted by economic What distinguishes a successful collection? downturns, but of course the recession is affecting us. In the “The most important thing is that the customers appreciate it, fourth quarter of the year most of our markets were affected by but naturally from a financial standpoint, it’s important for the consumption being more restrained, although we continued to collection to sell out.” increase our market shares in increasingly competitive markets”, What is the key to H&M’s success? says Rolf Eriksen, and continues: “Basically it’s our business concept: fashion and quality at the “H&M stands strong and we are focusing on the future. The best price. But it’s our employees that make it possible. Our economic situation is creating great opportunities that we are committed employees are essential to H&M’s ability to grow and going to take, for example in terms of access to new attractive continue to be highly profitable. At H&M we share the same commercial locations and being in a strong position to negotiate. goals at the same time as we minimise bureaucracy and focus This year we plan to open a net amount of 225 new stores and on the individual. We delegate a lot of responsibility to local recruit 6,000 to 7,000 new employees.” markets, stores and individual people – and we encourage people Describe H&M’s development during recent years. to take their own initiatives at all levels.” ”H&M has expanded in recent years in Europe, the US, Asia and What is H&M’s new CSR strategy? the Middle East, extended Internet and catalogue sales to more “In 2008, we developed a new sustainability strategy under which countries, developed new concepts and positioned itself as an sustainability will be considered in all departments within the international fashion brand with more than 100 designers and company and responsibility for it shared by all H&M employees.” much appreciated guest designer collections. In 2008, H&M “For H&M, it is self-evident to take responsibility for social acquired the Swedish fashion company FaBric Scandinavien which issues and the environment. Sustainability is one of H&M’s includes the store chains Weekday and Monki as well as the cornerstones and part of what we stand for. This is true both for Cheap Monday brand. The year before, H&M opened COS, our own stores and for our suppliers’s factories. One fundamental Collection of Style, and in 2009 H&M Home will offer fashion principle is that H&M’s products must be manufactured under for the home via Internet and catalogue sales.” good working conditions. That’s why H&M sets high standards In 2008, a net total of 196 stores were opened. An additional for working conditions and actively applies a Code of Conduct for 20 stores were added through the acquisition of FaBric Scandi- long-term improvement for those who manufacture our products.” navien. The expansion goal for H&M is to grow by 10 – 15 percent What does H&M mean to you? in new stores annually – a strategy that involves constant expansion “H&M for me is a business based on teamwork, humility and into new markets. The major establishments of the year were the respect for people. At the same time we are cost-conscious and expansion into Japan as well as adding the franchise markets of have a competitive instinct that makes us aim for constant Egypt, Saudi Arabia, Bahrain and Oman. improvements.” What was the most important establishment in 2008? “We have experienced fantastic growth, but we are always “For many years we have had a vision of opening stores in Japan. heading towards the next challenge.” There is a great interest in fashion in Japan and I, personally, What are the greatest challenges H&M will face in the future? have always found the Japanese style exciting. It turned out to “When we expand into new markets it’s important that we do not be our greatest launch success ever with sales that exceeded our lose sight of our core values. We also need to manage all of the high expectations.” components that H&M consists of in an effective way and ensure “The Group’s store expansion in 2008 has also involved raising that our core values are upheld in all parts of our organisation the standard of our stores and developing new concepts for store regardless of country or cultural differences. 2009 will be an interiors. The stores in Tokyo and the new flagship stores in exciting and intense year with new stores, new markets and new London and Barcelona are inspirational design experiences for products for our customers, and above all, new opportunities,” our customers. The COS chain, which offers fashion in a higher concludes Rolf Eriksen. price segment, is also an exciting venture for the H&M Group.” After 23 years at H&M, Rolf Eriksen will retire in 2009 as Where will you expand next? previously announced. “In 2009, the Group is planning to open 225 stores net; most In February 2009, the Board of Directors decided to appoint will be in the US, France, Italy, Spain, the UK and Germany.
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