Thursday September 20, 2012
H&M still a 'family business' at heart
IT is bewildering how a company can be perceived as a ďfamily businessĒ when it has a staff strength of 94,000 and more than 2,600 stores strewn over four continents. But for 65 years, H&M has remained steadfast to its roots of ďquality fashion at best pricesĒ, and this, says Karl-Johan Persson, is the product of a ďfamilyĒ working in unison with a clear direction.
H&M started off as a womenís clothing store in 1947 in Vasteras, Sweden. Hennes is the Swedish word for ďhersĒ. In 1968, Persson bought Mauritz Widforss, a hunting store which stocked menís clothing, and the name was changed to Hennes and Mauritz. Guided by the strong values that run through the veins of the company and steered by Persson, the grandson of founder Erling Persson, the brand has enjoyed increased sales last year despite the current challenging fashion retail market and profitability buoyant at an impressive 18.5%.
H&M has market presence in 44 markets, with Germany taking the lion share. It will be opening in Malaysia and Thailand this month, and next year, the brand is looking at Indonesia and Estonia.
Coming from the right stock helps, but Persson also has a background in business and economics, and ran his own successful events management company before joining H&M, proving his credentials as the right man to sit at the helm.
His first introduction into the fashion business was the label COS, which he established in 2005. Perrson joined H&M in an operational role that same year, and was appointed head of expansion and business development in 2007, before becoming CEO in 2009 to succeed Rolf Eriksen.
The amiable 37-year-old CEO was accommodating enough to make time for a short 10-minute morning interview, despite having to fly out to Bangladesh right after lunch. If I was expectating a strapping tall, blue-eyed blond Nordic, it could have been a little disappointing as Persson has brown hair and sports a darker tan, but he makes good on the good-looking Swede promise. We sit down for a quick tete-a-tete on H&Mís upcoming Malaysian foray.
How do you view H&Mís expansion into Asia and making its presence felt in Kuala Lumpur?
We looked at wider Asia and the economy is growing rapidly. We decided to go into China, Japan, South Korea, and other countries. Malaysia was the natural next step, judging by the size of its economy, demographics and fashion interest.
Why did it take a year after Singapore before H&M launched in Malaysia?
We have a good expansion rate, opening almost 300 stores last year, so thereís really a lot going on. Our business model is working everywhere Ė maybe from the outside it seemed logical to open right after Singapore, but it involves a lot of work, from the planning side, buying, the IT systems, finance, and many other aspects. Thereís a lot of homework to be done and the location is also very important. Weíve known about Malaysia for some time, but we needed to prepare and in the best possible way.
How do you see the fashion direction in Malaysia?
We will make local adaptions, and after we set up store, weíll see how it goes, the interest and demand.
What are your thoughts for opening night?
We are very excited about the opening. A little nervous as itís the first store, but we believe we have something in terms of the low prices at our level of fashion. Prices will be very competitive, I assure you.
Despite the size of the company, why do you say H&M is a family business?
Itís still a family business in the sense that we still have a small company feel. Or so Iíve heard from people who stay a long time in H&M. Itís a close knit family, with 94,000 people contributing to its success; itís not about one person at the top.
Would you describe yourself as hands-on?
Yes. We have open doors, close communications. Itís also a lot about delegation, alloting responsibilities and believing in the people.
Was it a given that you would one day head H&M?
I knew from an early age that I would be in H&M, but maybe not this position. When I was very young, I wanted to be a tennis player!
What is your personal style?
I wear a lot of H&M, of course, but also a lot of other labels. I like many up-and-coming Swedish designers. My own style isnít flamboyant, Iím more conservative.
Whatís the near future like for H&M?
You will see more expansion in the next few years. We are looking at many new markets.