Nicole LesterFM225 Fashion Merchandising

Professor S. Piazza1 May 2013

Term Project

H&M is one of the top fast fashion retailers of the new millennium. This type of retailer

is the biggest growing category in the industry. H&M is based in Sweden in 1947 and there are

2,566 stores worldwide (H&M 1). Their annual report for 2012 has their revenues at

$18,820,484 up from $15,872,856 in 2011(“H&M Hennes & Mauritz AB Company Information”

1). In today’s economy, each day consumers want more options and new styles but they want it

now and at inexpensive prices. This is why the category is doing so well because it is:

“a sector of the fashion industry where retailers capitalize on rapidly changing fashion trends and deliver new styles to shoppers at a faster rate than traditional retailers. It’s radical in its politics, intentionally disrupting the traditional supply chain management practices and saying adieu to vertical integration. What results is a new equation – one that not only redistributes profits and margins, but strongly favors the manufacturer, who, in this case, is also the designer, distributor, and retailer” (Jang 1).

This is also why there are new, up-and-coming fast fashion retailers that are direct competition

with H&M such as Forever21, Zara, Uniqlo and Topshop. With Zara and Uniqlo in the United

States now, H&M has to keep up with their competition’s innovative form of production that

outruns any other form of fast fashion or other type of retailer by cutting their lead time down

to weeks instead of months (Dutta 1). And since the brand has not mastered this new form, we

must provide new, forecasted styles as quick as our manufacturers can produce them.

H&M’s target customer is an innovative, stylish individual that sets new trends in

their social groups and knows about new fashion items immediately. Even though they can be

considered fashion leaders, they are still wary about prices and want to get fashionable items

without investing a lot of money. The target market being professional men and women ages

18-34 who buy new fashion seasonally, if not more. They “see shopping as a social activity

providing pleasure in their daily life” (“H&M: Product Strategy” 1). They also carry a line of teen

and children’s clothing in specific locations.

I chose this business because it is ever-changing, as is the industry, but fast-fashion is

more exciting. We all must be quick to make the right decisions or risks in order to better the

business which makes it all the more entertaining. Of course, at times there are stressful

situations but what else produces great work and production other than a little urgency and

importance? I live for revolution, as does the brand, which is why I was a perfect fit in their

corporate culture.

I am the buyer for H&M Women’s Tops for Spring 2014. My department is broken down

into five classifications: 1) Basic Knits 2) Wovens 3) Sweaters 4) Blazers/Jackets 5) Fashion. The

following is my forecasting research for Spring 2014.

For Spring 2014, large, easy flowing sleeves, such as the bat wing and leg-o-mutton, and

bodices are being shown on multiple forecasting sites and on the runway for women (Stylesight

1). Also, with every spring comes the floral prints, but we are not seeing the small version in

2014. Bold, oversized flowers, in more of a painted or drawn-on fashion, are the trend with a

basic print background such as polka dots or houndstooth (Fashion Snoops 1).

Fashion Snoops predicts a lot of burnout and openwork fabric trends in knits for Spring 2014

(Fashion Snoops 1).

There was an enormous amount of runway photographs of the predicted updated peplum rage

(Fashion Snoops 1). The start of the peplum has risen to the empire waistline. Many of the

peplums are showing to be more elaborate and long with large, flowing sleeves.

Boxy T-shirts were all over the runway for Spring 2014 as shown on Fashion Snoops.

Oversized, gathered necklines and exotic prints were the most popular (Fashion Snoops 1).

Large sleeves on the T-shirts were also a trend on the runway showing off the rounded shoulder

line.

The basic colors for Spring 2014 are the usual pastel and bright oranges, violets and yellows

with more of an emphasis on the pinks, blues and greens (Stylesight 1). The only difference is

that the colors are toned down in a tinted palette and all tints and tones of white are trending

(WGSN 1). According to StyleSight, blue and pink stories are going to be trending for colors in

Spring 2014 (Stylesight 1). They explained the key colors to be whites, neutrals, blues and pinks.

The other forecasting sites, such as Doneger and WGSN, agree on the blue, pink and white

stories as well as the yellow-green rage (Doneger Creative Services and WGSN 1).

As for jackets, the motorcycle jacket is going to be popular again next spring but with a more

updated look with unique style detail according to the designer (Doneger Creative Services 1).

Following my research on trends for Spring 2014, the assortment of my classifications

are as follows:

The first styles with the asterisk next to them are the key items of each classification. I

chose these styles as the key items because they are innovative to the trends of Spring 2014

and they will attract the H&M target market. In the basic knit and fashion classification, the key

items show the flowing sleeves and bodices. For the key item sweater, it is an oversized

burnout jersey knit and the jacket key item is H&M’s version of the motorcycle jacket. Finally,

the key item for the woven classification is a tied waist button up which is trending this year

and will continue into Spring 2014. The classifications of basic knits, wovens, fashion and

sweaters have the following percentage of distribution:

The jacket/blazer classification has a percentage of distribution described by this graph:

Overall, each classification will represent an even 20 percent of the entire tops

department. Sizing for the wovens, jackets and fashion tops will be size two through fourteen

while the sizes for the sweaters and basic knit tops will be sizes extra small through extra large.

Here are the number of sizes I will buy for each style depending on their category sizing:

Size 2 4 6 8 10 12 14

1 1 2 2 2 1 1

Size XS S M L XL

1 2 3 2 1

I have decided on two clusters of Northeast Urban and Vacation for the stores I am

buying for. The Northeast Urban stores include New York City, Philadelphia, Buffalo, Cleveland

and Washington, D.C. The Vacation stores include Miami, Los Angeles, Atlanta, Dallas and

Myrtle Beach. Because H&M is a fast fashion retailer and has the same customer base no

matter the location, I have decided that the assortment for each cluster will be the same. This

way this saves time and money on manufacturing and transportation which allows more

revenue for future production. Plus, knowing that the target customers are women who are

innovative and fashion forward, each location will have the same market of women who are

knowledgeable on what’s trending for the season and will understand the fashion items

featured. On the next page is the basic layout of the assortment planned for H&M’s Women’s

Tops for Spring 2014. This includes two walls on the right and left sides with two quarter

rounders in front of each wall and a small table in front of the rounders. There are also two T-

stands on either side of the entrance with a feature table directly across from the entrance.

Behind the feature table is a half rounder followed by another table behind it.

Note that this is the layout showing only Women’s Tops and that bottoms will be mixed

in as well.

My Open-to-Buy was $42,500. The total units for all five classifications are 4,040

with a total cost of $42,038.60 and a total retail of $108,768.00 resulting in an overall markup

percent of 61.35%. The following are the totals for each classification:

Total WovensUnits 900Cost $8,985.00Retail $23,255.00

Total Basic TopsUnits 900Cost $5,685.30Retail $14,805.00

Total Fashion TopsUnits 1,000Cost $10,882.00Retail $27,950.00

Total SweatersUnits 540Cost $5,226.30Retail $13,293.00

Total JacketsUnits 700Cost $11,260.00Retail $29,465.00

The advertising campaign will start with the traditional H&M marketing, such as their

magazine advertisements and billboards as shown below.

Every new season or new line that H&M shows includes a new face in their advertisements,

from celebrities such as Lana Del Rey and Beyonce to top models like Gisele Bundchen and Coco Rocha.

For the Spring 2014 advertisements, we have decided on Carey Mulligan, the leading lady in The Great

Gatsby, because this movie is top inspiration for the new season. This will be most advantageous to our

business because this is what the target customer expects to see. We need to stay traditional in the base

of our advertising campaigns and just change the face, if you will, for each new line. Simple photographs

of models or celebrities in our products with a price point next to it and our logo sells the brand in itself

everytime. An extended version of the photographs can be put into a 20 second segment for a

commercial with house music in the background for a month’s air time on networks like MTV, VH1, BET,

E!, etc.

Next, since H&M has their application for Androids and iPhones, iPads, etc., there will also be

updates sent to every users phone of the new line with a special promotion attached.

This reaches the target market because most of the 18-34 year olds are impatient with shopping

in stores and rely on technology to tell them what the new trends are and where they can find them.

The H&M app does exactly that and more which is a great alternative to online shopping because as of

now our brand does not yet ship to the United States. Also, by using a promotion, the customer will feel

the need to shop the new line because there is incentive in doing so. The application update will be sent

out to users in the beginning of February to get them excited and ready for the new shipments coming

mid-February. The magazine advertisements will come out in February issues and billboards will be

posted in the first week of the month. Finally, the commercial would air the entire month of February.

Work Cited

Doneger Creative Services. The Doneger Group, 2013. Web. 12 Mar 2013.

Dutta, Devangshu. “Retail at the Speed of Fashion”. 3isite.com. Third Eyesight, 2002. Web PDF. 24 Apr 2013.

Elie Tahari. 417 W Broadway Manhattan, NY 10012. Store Visit. 26 Mar 2013.

Fashion Snoops. Fashion Snoops, 2012. Web. 28 Mar 2013.

Forever21. 1540 Broadway, New York, NY 10036. Store Visit. 26 Mar 2013.

H&M. 111 5th Ave Manhattan, NY 10003. Store Visit. 26 Mar 2013.

H&M. 425 7th Ave New York, NY 10018. Store Visit. 26 Mar 2013.

H&M. H&M US, n.d. Web. 24 Apr 2013.

“H&M Hennes & Mauritz AB Company Information”. Hoovers.com. Hoovers, 2013. Web. 24 Apr 2013.

“H&M: Product Strategy”. Heroinandmoss.blogspot.com. Blogger, 2013. Web. 24 Apr 2013.

Jang, Brian and Mena Xiong. “Fast Fashion: A Deconstruction”. Brandcentered.com. VCU Brandcenter, 2013. Web. 24 Apr 2013.

Macy’s. 151 W 34th St New York, NY 10001. Store Visit. 12 Mar 2013.

Stylesight. Stylesight, Inc., 2013. Web. 4 Mar 2013.

Uniqlo. 666 5th Ave New York, NY 10103. Store Visit. 12 Mar 2013.

WGSN. Worth Global Style Network, 2013. Web. 12 Mar 2013.