Amid all the dire financial news of late, it's easy to believe that the retail market is on its way to becoming a wasteland, populated by vacant, run-down malls and gargantuan box stores. Watching the declining fortunes of malls and the stores that populate them, many analysts seem to be predicting a freaky, post-apocalyptic future in which all clothes will be purchased online or from Wal-Mart.
Before we go overboard, though, it might be wise to consider the current fortunes of H&M. Listed on the Swedish Exchange as HMB, H&M's shares have been consistently rising, and its first-quarter profit is up by 28%. In fact, even as many clothing retailers are closing stores, H&M is planning to open 190 outlets in the United States and Europe. It already is running profitable stores in China and the Middle East, and is planning on opening stores in Russia starting in 2009.
H&M's secret is surprisingly obvious: it sells well-made, nicely-tailored clothing at very reasonable prices. Its stores are clean and well-run, its employees are knowledgeable, and its styles are up-to-date. In fact, for considerably less than the cost of a baggy, ill-fitting suit from JC Penney, I can buy a matched-separates pair of pants and jacket from H&M. Its clothes fit well, wear well, and don't carry the stigma that is attached to most department stores.
Good prices, good service, good product ... it isn't hard to see why H&M is gearing up to be the last one standing!
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Oil hits record $127.43 on supply concerns, raised Goldman forecast
