What does a silver-haired, 55-year-old Swede with Savile Row taste know about female fashion? In the case of Stefan Persson, chairman of Hennes & Mauritz, a lot. Persson has turned H&M into Europe's largest clothing retailer, with more than 840 stores in 14 countries. When H&M opened its first store in Manhattan, hordes of shoppers queued on the sidewalk eager to stock up on the retailer's inexpensive yet trendy wares. "As a newcomer to the U.S., we were pleasantly surprised by the positive reaction," says Persson with characteristic reserve.
Persson's strategy is to keep the styles fresh and the inventory moving. To hold down costs, he designs merchandise in-house and manufactures it in low-cost countries such as Bangladesh, China, and Turkey. And H&M has one of the fastest turnaround times in the industry, moving merchandise from drawing board to store shelves in as little as three weeks.
While other retailers struggle, H&M is on target to post pretax profits of $833 million in 2002, up 34%, on sales of $5.8 billion, according to Goldman, Sachs & Co. Given Sweden's tiny population, Persson had little choice but to expand outside its borders. As long as demand for cheap chic fashion keeps growing, H&M's red logo is apt to crop up around the world.
KEY ACCOMPLISHMENTS
-- Opened 46 new stores in 2002, 15 in the U.S. alone
-- Expected to post 34% increase in 2002 profits
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