H&M - Summary

Summary: Hennes & Mauritz (H&M) opened its first store in the U.S. in 2000. Called by some the "IKEA of specialty retail", the Swedish company has been a hit in the U.S. market, targeting the young and hip with cutting edge design for urban tastes and with affordable prices. H&M carries everything from business attire to casual wear to beach wear for women, men and children. I have been excited to see H&M's organic cotton pieces and their designs that benefit outside causes.

Although H&M is overall a leader in the fashion apparel sector on corporate social responsibility (CSR) issues, their 100% outsourcing of production (they have no factories of their own) presents problems in monitoring and enforcement of CSR commitments. After being criticized by activists in the late 1990s for the the company's lack of attention to labor rights in its supply chain (including a controversial expose on Swedish television), H&M began to actively respond through, among other things, developing a Code of Conduct for its suppliers and a compliance program. However, the company is still targeted for the low wages paid by some of its suppliers and was recently accused of anti-union activities by the AFL-CIO (although, in the end, the company received praise for allowing the workers to organize.)

In 2005, H&M stiffened its CSR inspections among its suppliers by increasing interviews with workers and introducing extra measures to ensure documentation such as time sheets and wage records were correct. The company also improved training for its 40-plus supplier auditing team. In 2006, while implementing this new, more detailed auditing program, H&M uncovered an increase in document forgery and abuses of child labor laws among many of its suppliers.

In 2007, an independent investigation of Indian-based H&M supplier Gokaldas Export (also a supplier for other brands like Marks & Spencer, Mothercare and Gap, Inc.) uncovered many violations of international labor laws, including harassment, forced overtime and wages below the legal requirement.

Some Key Facts:

• H&M is an apparel and cosmetics company headquartered in Sweden, where it was started in 1947.
  
• H&M sells clothes and cosmetics in approximately 1,500 stores in 28 countries, has approximately 20 production offices around the world, and more than 60,000 employees.
• H&M does not have any factories of its own, but instead works with around 700 independent suppliers in primarily Asia and Europe.
• The retailer sources more than 60% of its products in Asia, more than half of which come from China.
• The company is controlled by the family of Chairman Stefan Persson (the billionaire son of founder Erling Persson); they own nearly 37%.

Personally Speaking: I was really excited to find out that H&M was coming to America. While in Europe for work in the late 1990s, I enjoyed browsing the racks of the H&M stores on my travels. I remember visiting that poor first store in NYC soon after it opened to find it looking like it has just been ripped apart by a tornado of fashionistas desperate for cheap Euro-fashion. I like H&M because you can find affordable pieces that are well-made (but also some that are NOT). Although many of the designs are targeted to younger audiences (and cut for the slim slim slim), I can always find something that is a little avant garde, but still appropriate for a professional 30-something.