Annual report 1996 in English (2.93 Mb) - About H&M

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Moreover, three major remodelling efforts were undertaken at thesame time that additional floorspace was added to existing stores.A more than 25 per cent expansion in the number of stores and a 40per cent increase in sales in the local currency placed a great strain on theorganisation, especially where warehousing and distribution activities areconcerned. In order to operate more efficiently, the four regional warehouseswere combined and relocated adjacent to the distribution centre for thecountry.The German market remained very sluggish, declining by 2 per cent.In 1995, the market declined by 6 per cent. To sum up, the German retailmarket is very weak at present.The Dutch operation opened stores in Rotterdam, Utrecht, Vlaardingenand Emmen during the year. The Dutch market increased by 3–4 percent, while H&M sales rose by 37 per cent measured in NLG.In Belgium, where H&M has been operating for four years, a total ofseven new stores were opened in Brussels, Tornai, Namur, Chatelineau,Hornu, Arlon and Rocourt outside Liège. In Antwerp, a new store was opened and a smallerstore was closed.H&M increased sales measured in local currency by 46 per cent. To cope with the dramaticincrease in volumes, the Group’s Belgian warehouse moved into new facilities in Aalst.The new 6,200 sqm facility is some 50 per cent larger than the old warehouse. As in pastyears, the Belgian market remained weak, and two chains of competitors withdrew completelyor partly from the market.The Group opened its first store in Luxembourg in the Belle Etoile shopping centre. Asthe Luxembourg market is limited, the operation has been integrated with the Belgian operationfor practical purposes. For legal and tax purposes, however, the operation is a branch of aDutch company.The Group’s Austrian company, which hasbeen operating for more than two years, expandeddramatically in 1996. A total of 12 new storeswere opened. At year-end, there were 19 H&Mstores in Austria. Half of the new storeswere acquired through the purchase of anAustrian company. These stores, whichwere previously part of a limited department-storeoperation, received a new H&Mprofile in the autumn. The stores, whichare located in Linz, Wiener Neustadt, St.Pölten and Vienna (three stores), got off toa successful start. Of the other six, fourwere opened in Vienna, one in Saltzburgand one in a shopping centre outside of WienerNeustadt.An expansion in the number of stores of this
magnitude along with a twofold increase in sales posed problemsfor the organisation. As in Germany, this manifesteditself mainly in the handling of goods. In order to rectify thisproblem, it was decided during the year to increase the size ofthe planned warehouse by 75 per cent to 26,000 sqm.The aforementioned acquired company was merged withH&M’s Austrian company. This allowed H&M to offset taxesagainst acquired losses.Our mail-order operation, H & M Rowells, which like theSwedish and Norwegian markets experienced a couple of weak years, developed positively in1996. Operations commenced in Finland in the autumn. As Sweden and Finland are membersof the EU, goods can be handled centrally in Borås, the site of the Swedish mail-orderoperation. Consequently, goods destined for both countries can clear customs in Swedenand then be distributed between the two markets according to demand.H&M will continue to expand in 1997. A net total of some 50 stores are planned.As in past years, the most dramatic expansion will take place in Germany, where 23new stores are expected to open. This means that H&M will nearly have doubled thenumber of stores in Germany, from 66 to 124, in three years. As sales in the olderstores rose during the period, the expansion has increased the volume of goods substantiallysince 1994. In order to handle this growth, total warehouse space will beincreased during the year by nearly 10,000 sqm to some 30,000 sqm. Consequently,further investments in warehouse equipment will be necessary.The central warehouse in the Netherlands, which serves stores in the Netherlands,Belgium and Luxembourg, will also be expanded, doubling the present 7,000sqm of floorspace. The investment in the warehouse (which is currently leased byH&M with a provision to purchase the facility at a predetermined price in future) willbe financed by the landlord. As three new stores are planned for Belgium and two forthe Netherlands for 1997, the central warehouse will initially provide goods for 75stores.H&M believes that the Scandinavian countries and Switzerland are mature marketswith limited opportunities for new stores. The remodelling and upgrading of existingstores will continue on the same scale, however. In 1997, fournew stores will be opened in Norway, four in Denmark and twoin Switzerland.A Galne Gunnar store and a smaller H&M store will beopened in Sweden. The latter, which will open in Enköping,will only market underwear, accessories and cosmetics. Thereare already two stores in Stockholm with similar ranges. If theconcept is successful in a small town such as Enköping, similarstores may be opened in large and small towns alike.The dramatic expansion on the Austrian market will continuebut at a somewhat slower pace. A total of seven newstores are planned for the current year.The Group decided to begin operating in Finland in
Page 1 and 2: Annual Report 1996
Page 3 and 4: Financial highlights1996 1995Gross
Page 5 and 6: however. We comply with the most st
Page 9: year-end. The debt/equity ratio was
Page 14 and 15: Administration reportThe Board of D
Page 16 and 17: Group balance sheet (SEK M, Note 1)
Page 18 and 19: Group cash flow statement (SEK M)95
Page 20 and 21: Parent Company balance sheet (SEK M
Page 22 and 23: Parent Company cash flow statement
Page 24 and 25: 10 Shares and participationsSubsidi
Page 26 and 27: Five-year summary1991/92 1992/93 19
Page 28 and 29: The Board of DirectorsSten Wikander
Page 30 and 31: H&M factsSwedenEstablished: 1947Tur
Page 32: PRODUCTION AND PROJECT MANAGEMENT:

Annual report 1996 in English (2.93 Mb) - About H&M

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