SarahKristiana

ArmanJackie

Schulyer

Established:◦ Who: Erling Persson ◦ When: 1947◦ Where: Vasteras, Sweden

Beginning of H&M

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First store in the U.S◦ Opened in 2000◦ Located on Fifth Avenue in

Manhattan, New York 189 stores in the U.S.

H&M in the U.S

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Around 2,000 stores worldwide Around 70 suppliers About 74,000 people employed About 20 production offices around the

world

H&M facts

Offer fashion and quality at the best price Produce fashion for women, men, teenagers

and children Offer clothes, cosmetics, accessories and

footwear Promote sustainability strategy

H&M Platform

Enforce product policy Strive to use sustainable materials Have routine testing for quality assurance

Shrinkage/ color fading Pilling Flammability Chemicals

Platform Continued

Ensure the best price by:◦ having few middlemen◦ buying large volumes◦ having a broad, in-depth knowledge of design,

fashion and textiles◦ buying the right products from the right market ◦ being cost-conscious at every stage◦ having efficient distribution

Achieving Cost Strategy

Run in an economically, socially and environmentally sustainable way

Minimize negative impacts on the environment

Manufacture goods under satisfactory working conditions

CSR Strategy

Vice President, CSR Strategy

Increase number of stores by 10-15% Boost sales in existing stores Increase use of sustainable materials

(organic cotton)

The Future of H&M

65% of organic cotton comes from India

30% of organic cotton sample tested contained GM cotton

100% Organic?

PROBLEM!Google Image

H&M Organic Exchange APEDA EcoCert Control Union

Key Players

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Mixed up in storage Erosion of seeds

during farming Produce different types

of cotton in one area

Contamination

Who is at Fault?

SUPPLY CHAIN!

Marketing?Suppliers?

Supply Chain?

No manufacturing of clothes Rely on 700 suppliers in Asia & Europe Suppliers sign Code of Conduct Regular checks on suppliers by 60 Auditors Product Certification by Control Union

Unique Supply Chain

Supply Chain

Request from headquarters

Farming

Suppliers & Manufacturing

CertificationH&M Warehouse

Retailers

Code of Conduct

Control Union certification fraud Lack of product testing Auditing procedures

Where problem occurred

Destroyed unsold clothes prior to cotton scandal

Committed ethical problem, but created business solution

Tarnished Reputation

Public mostly unaware Industry insiders and Eco-friendly

consumers most critical

Post-Scandal Status

Stock risen 175 SEK over past year

Economic Impact

Recalled 967,000 toys with lead paint Experienced 17th recall in last 10 years Ranked No. 1 in Fortune’s dumbest

moments in 2007 Had 11% lead where Fed. Law allows .06%

Mattel’s Industry Impact

Increase control over supply-chain Implement random testing Apologize to Indian cotton manufacturers

and environment sustainability supporters Be up front; Provide link to scandal

on homepage Improve brand perception

◦ ie: Garden Collection

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