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Mission Statement

“H&M's purpose is to offer their customers fashion and quality at the best price. H&M states numerous of times that quality is

more than making sure that products meet or exceed their customer’s expectations. H&M is constantly working to better their

products by manufacturing under good working conditions, and with limited impact on the environment. H&M takes

responsibility for how their operations affect people and the environment which is key for their profit and growth.”

“H&M is committed to integrating social and environmental concerns into all their business operations and investing in the

communities. This company has a lot of great things going on such as charitable organizations both globally and locally. Some of

the global organizations include: UNICEF, Water Aid, Hand in Hand, and Fashion against Aids. In the US, they work

with Making Strides for the American Cancer Society in multiple cities to help raise funds for breast cancer research and with the

Boys and Girls Club of America.” 1

http://stylehm.blogspot.com/2011/02/mission-statement.html

In choosing the new location in Cherry Creek Shopping Center, we are supporting our mission statement by

expanding our market penetration to this area of Denver. We are also providing quality, convenience, and the

best prices on fashionable, designer clothing to our consumers in the Cherry Creek and surrounding areas.

We are promoting economic growth by providing jobs to the locals of the area and providing the best work

environment possible to our employees. Our dedication to our customers, our products, our environment,

and our community is the foundation our business is based upon, and we will strive to create that

environment for the benefit of all in the Cherry Creek area.

1 http://stylehm.blogspot.com/2011/02/mission-statement.html

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DEMOGRAPHIC

We will be opening a Hennes & Mauritz AB (a.k.a. H&M) store location in Cherry Creek Shopping Center in

the southeastern suburb of Denver, Colorado called Cherry Creek. This will be an extension to the flagship

store, located 3.5 miles away from the new site location, at 3000 E 1st Ave, Denver, CO.2 There are two

major commercial centers located in Cherry Creek and the Cherry Creek Shopping Center is one of them,

conveniently located off the major traffic route of East First Avenue.

General Information:

Cherry Creek, Denver, Colorado3

Latitude: 39.731237

Longitude: -104.952434

Population: 20372

Density: 8138.83

(People per square land mile)

Housing Units: 12360

Land Area: 2.5 sq. mi.

Water Area: 0 sq. mi.

The information is provided for the zip code 80206 which is the majority of the Cherry Creek area of Denver,

CO. Of the 20,732 people making up the area, the median age is 37 for women and 36 for men4, which fits

the demographic that our store serves. Our firm currently is designing cheap, chic clothing mainly for men

and women ages 18 to 45. We also provide children’s apparel and cosmetics to the consumer, which provides

a greater appeal to the market we are targeting.

Unemployment rates have seen a sharp increase since 2007 in the state of Colorado. This past year they have

started to slightly decline and we look forward to contributing to this decrease by hiring our staff locally.

2 http://maps.google.com/ 3 http://www.zipskinny.com/index.php?zip=80206&pagetype=charts 4 http://www.citymelt.com/zip/Colorado/80206-CO.html

www.zipskinny.com

35.8 36 36.2 36.4 36.6 36.8 37 37.2

Male Female

36.3 37.2

Median Age In Zip Code 80206, Colorado

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Colorado State Unemployment Statistics

http://www.bls.gov/web/metro/laummtch.htm

According to the Bureau of Labor Statistics, the unemployment percent for zip code 80206 is 2.6 and the

percent below the poverty line is 9.9. Despite these statistics, unemployment has decreased 0.8% from

December 2010 to December 2011 in the Denver-Aurora-Broomfield, CO Metropolitan Statistical Area,

which is creating a larger amount of people in the area with disposable income and improvement to the

economy.

The education levels in zip code 80206 are above U.S. average5 with 92.8% graduating from high school or

higher and 56.8% of the population with a Bachelor’s degree or higher. With a higher education the Bureau

5 www.census.gov

2005 to 2011

4

of Labor Statistics suggests that earnings will be higher and the chance of unemployment will be lower. A

large amount of the consumers in the Cherry Creek area have a higher education level, which leads to an

increased amount of disposable income.

The median household income annually is $40,879,6 while the average household income for zip code 80206

is between $50,000 and $74,999. The household income being above the U.S. average improves the

opportunities for consumers in the area to spend their disposable income in our store.

The most common occupations in the Cherry Creek area are Management/Professional at 54.6% and that is

followed by Sales/Office positions at 24.6%.7 These types of occupations usually provide stable work

environments with opportunities to excel. This large percentage of consumers can be relied on to bring a

good source of revenue to the store. We also provide professional staple pieces for wardrobes and

sophisticated styles that will appeal to these groups.

6 IBID 7 IBID

www.census.gov

% 9 % 6

% 14

% 14

14 %

% 15

% 8

% 10 % 4 6 %

Annual Household Income in Zip Code 80206

<10,000

$10,000-$14,999

$15,000-$24,999

$25,000-$34,999

$35,000-$49,999

$50,000-$74,999

$75,000-$99,999

$100,000-$149,999

$150,000-$199,999

$200,000+

5

The Cherry Creek area’s statistics show that a new store in this location will prove successful. Occupations

in the area are stable, household incomes are higher than the U.S. average, and the unemployment rate is

going down which creates a promising market for our store.

Demographic breakdown: 8

An easy way to get a feel for the demographic in Cherry Creek is to split them into three types of groups.

The most common “types” of people residing in the Cherry Creek are referred to as Power Singles,

Multilingual Urbanites, and High Income D.I.N.K.s (Dual Income No Kids). The income level for all three

groups is high enough that our store could be found appealing to all of them.

1. Power Singles

—High-income urban singles.

These are classified as highly educated professionals, many with advanced degrees. They draw a handsome

salary and have reasonable living expenses while living a hip, upscale life in an urban center.

2. Multi-lingual Urbanites

—Urban dwellers who speak more than one language.

Some have a high school or college education, and they work in a variety of occupations. This group has

moderate to upper-scale earning potential.

3. High $$ DINKs

—Urban high-income couples with no children.

8 http://www.zillow.com/local-info/CO-Denver/Cherry-Creek-people/r_268635/

www. zipskinny.com

% 0.00 % 20.00 % 40.00

60.00 % % 54.60

% 11.70 24.60 %

0.10 % 4 % 5 %

Occupations in Zip Code 80206, Colorado

Percentage

6

Middle-age Dual Income No Kids couples living in the city and making very comfortable combined

household incomes. Most own their own homes and are highly educated professionals, many with advanced

degrees.

Cherry Creek Shopping Center houses a variety of stores ranging from department stores

(Nordstrom & Macy’s) to trendy, smaller stores (Banana Republic, Urban Outfitters, Forever 21, and Levi’s).

Our target market is young professionals and fashion savvy shoppers, which are already drawn to this

shopping center by its’ other fashion forward stores that already appeal to our target market, such as,

Charlotte Russe, Urban Outfitters, and Forever 21.

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PSYCHOGRAPHIC

VALS PRIMARY GROUPS

According to the VALS Survey, our primary consumers fall into the categories of Experiencers and

Achievers.9 Experiencers like variety and want to be one-of-a-kind, which is what we provide to our

consumer with our latest fashion trends and varieties to choose from. Achievers are goal-oriented, but also

pride themselves on being fashionable and high-end, which is an image that can easily be obtained from our

merchandise.

EXPERIENCER

Experiencers are motivated by self-expression. Young, enthusiastic, and impulsive consumers, Experiencers

quickly become enthusiastic about new possibilities but are equally quick to cool. They seek variety and

excitement, savoring the new, the offbeat, and the risky. Their energy finds an outlet in exercise, sports,

outdoor recreation, and social activities. Experiencers are avid consumers and spend a comparatively high

proportion of their income on fashion, entertainment, and socializing. Their purchases reflect the emphasis

that they place on looking good and having "cool" stuff.

Favorite Things:

• VW

• Rolling Stone

• Red Bull

• to be entertained

ACHIEVER

Motivated by the desire for achievement, Achievers have goal-oriented lifestyles and a deep commitment to

career and family. Their social lives reflect this focus and are structured around family, their place of worship,

and work. Achievers live conventional lives, are politically conservative, and respect authority and the status

quo. They value consensus, predictability, and stability over risk, intimacy, and self discovery. With many

wants and needs, Achievers are active in the consumer marketplace. Image is important to Achievers; they

favor established, prestige products and services that demonstrate success to their peers. Because of their

busy lives, they are often interested in a variety of time-saving devices.

Favorite Things:

• Honda

• Every Day with Rachael Ray

9 http://www.strategicbusinessinsights.com/vals/presurvey.shtml

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• low-calorie domestic beer

• recognition at work

Our store offers merchandise that delivers the latest styles and fashions that fit a wide range of lifestyles from

the everyday office person to someone who wants to have a good time out with friends. Our merchandise is

also versatile, so items can be mixed and matched to fit the needs of all lifestyles and the two personalities

listed above. Achievers can locate essential items for work and home for their interchangeable lifestyles,

while experiencers can express themselves with our loud, colorful blouses and flashy accessories.

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VALS SECONDARY GROUPS

The secondary groups that our store will appeal to are Innovators and Strivers10. Innovators are higher class

and sophisticated and would fit the description of a primary shoppers’ parent or close relative. Strivers are

more of the impulsive shopper and would intermittently come to the store, depending on their financial

situation.

INNOVATORS

Innovators are successful, sophisticated, take-charge people with high self-esteem. Because they have such

abundant resources, they exhibit all three primary motivations in varying degrees. They are change leaders and

are the most receptive to new ideas and technologies. Innovators are very active consumers, and their

purchases reflect cultivated tastes for upscale, niche products and services. Image is important to Innovators,

not as evidence of status or power but as an expression of their taste, independence, and personality.

Innovators are among the established and emerging leaders in business and government, yet they continue to

seek challenges. Their lives are characterized by variety. Their possessions and recreation reflect a cultivated

taste for the finer things in life.

Favorite Things:

• BMW

• Wired

• sparkling water

• a rewarding experience

STRIVERS

Strivers are trendy and fun loving. Because they are motivated by achievement, Strivers are concerned about

the opinions and approval of others. Money defines success for Strivers, who don't have enough of it to meet

their desires. They favor stylish products that emulate the purchases of people with greater material wealth.

Many Strivers see themselves as having a job rather than a career, and a lack of skills and focus often prevents

them from moving ahead. Strivers are active consumers because shopping is both a social activity and an

opportunity to demonstrate to peers their ability to buy. As consumers, they are as impulsive as their financial

circumstance will allow.

Favorite Things:

10 IBID

10

• Chevrolet

• Playboy

• Coke Classic

• win the lottery

Referencing the annual household income for zip code 8020611, both income brackets for Innovators

(high income) to Strivers (low to middle income) are present in the Cherry Creek area. Innovators will also

be drawn to other shops in the Cherry Creek Shopping Center, such as, Coach, BCBGMAXAZRIA, Tiffany

& Co., and Ann Taylor,12 which can provide our store with the opportunity to appeal to them and their

family members. Strivers will also come to the shopping center for the trendy values offered from stores like

ours, Forever 21, Macy’s, and Nordstrom. The larger department stores will have added appeal for Strivers

when there are large, seasonal sales.

PRIZM ANALYSIS

According to the Prizm Analysis, three market segments that will appeal to our new store location are

referred to as Urban Achievers, American Dreams, and Money & Brains13. Our goal is to continue to

provide something unique for each group, whether it is professional wear, affordable clothing for the family,

or fashion tips and updates that are provided on our company website14.

URBAN ACHIEVERS

Lower-Mid Younger Family Mix

Concentrated in the nation's port cities, Urban Achievers is often the first stop for up-and-coming

immigrants from Asia, South America, and Europe. These young singles, couples, and families are typically

college-educated and ethnically diverse: about a third are foreign-born, and even more speak a language other

than English.

• Social Group: Midtown Mix

• Lifestage Group: Young Achievers

2010 Statistics:

• US Households: 1,790,485 (1.54%)

• Median HH Income: $37,252

11 www.census.gov 12 http://www.shopcherrycreek.com/shopping/department_stores 13 http://www.claritas.com/MyBestSegments/Default.jsp?ID=20&id1=1027&id3=80206 14 http://www.hm.com/us/life

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Lifestyle Traits:

• Shop at Banana Republic

• Play soccer

• Read Latina

• Watch Tyra

• Volkswagen GTI

Demographics Traits:

• Urbanicity: Urban

• Income: Lower-Mid

• Income Producing Assets: Low

• Age Ranges: <35

• Presence of Kids: Family Mix

• Homeownership: Renters

• Employment Levels: White Collar, Mix

• Education Levels: Some College

• Ethnic Diversity: White, Black, Asian, Hispanic

With urban achiever’s income levels and the probability of children, our store gives a fashionable parent the

opportunity to save money while shopping for themselves, their spouse, and their children.

Reading lifestyle & fashion magazines and watching self-empowerment television shows, such as Latina

Magazine and the Tyra Banks Show, show a consumer that is concerned with their well-being and their image

in society. Consumers like these will be intrigued by our stores merchandise and come to shop.14 15

AMERICAN DREAMS

Upper-Mid Middle Age Family Mix

American Dreams is a living example of how ethnically diverse the nation has become: just under half the

residents are Hispanic, Asian, or African-American. In these multilingual neighborhoods--one in three speaks

a language other than English--middle-aged immigrants and their children live in upper-middle-class comfort.

• Social Group: Urban Uptown

• Lifestage Group: Young Accumulators

2010 Statistics:

• US Households: 2,466,519 (2.12%)

• Median HH Income: $58,517

14 http://www.latina.com/ 15 http://www.tv.com/shows/the-tyra-banks-show/

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Lifestyle Traits:

• Shop at Old Navy

• Buy motivational tapes

• Read Black Enterprise

• Watch TeleFutura

• Lexus IS

Demographics Traits:

• Urbanicity: Urban

• Income: Upper-Mid

• Income Producing Assets: Above Avg.

• Age Ranges: 35-54

• Presence of Kids: Family Mix

• Homeownership: Homeowners

• Employment Levels: Professional

• Education Levels: College Grad

• Ethnic Diversity: White, Black, Asian, Hispanic

American Dreams hold professional positions and tend to have a higher income level than the other two

segments. They are also a family mix, which increases our appeal to them as the consumer. Our store offers

versatile, sophisticated looks for adults, while offering apparel for the kids.

MULTI-CULTI MOSAIC

Lower-Mid Middle Age Family Mix

An immigrant gateway community, Multi-Culti Mosaic is the urban home for a mixed populace of Hispanic,

Asian, and African-American singles and families. With nearly a quarter of the residents foreign born, this

segment is a mecca for first-generation Americans who are striving to improve their lower-middle-class status.

• Social Group: Midtown Mix

• Lifestage Group: Mainstream Families

2010 Statistics:

• US Households: 1,940,720 (1.67%)

• Median HH Income: $36,945

Lifestyle Traits:

• Shop at CVS Pharmacy

• Buy Spanish/Latin music

• Read Seventeen

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• Watch Premio Juventud

• Volkswagen GLI

Demographics Traits:

• Urbanicity: Urban

• Income: Lower-Mid

• Income Producing Assets: Below Avg.

• Age Ranges: 35-54

• Presence of Kids: Family Mix

• Homeownership: Homeowners

• Employment Levels: WC, Service, Mix

• Education Levels: Some College

• Ethnic Diversity: White, Black, Asian, Hispanic

This family mix can take advantage of the variety of options in our store as well. From children to adults, we

can offer apparel and accessories for everyone. The lifestyle traits of this segment show an emphasis on Latin

culture, fashion, and beauty, which directly relates to the promotion of fashion and beauty that we do every

day in our store. 16

16 http://musica.univision.com/premios-juventud/

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INDIRECT COMPETITION

BRIO TUSCAN GRILLE

Store Location: Outside of the Cherry Creek Shopping Center Property on Cherry Creek West

Where to Park: Outdoor surface lot off of First Avenue (heavy traffic route17) and Clayton Street or valet

parking is available.

This grill is located outside of the mall and gives shoppers the sit-down, quality meal that they can enjoy.

Shopping can take a lot of energy and this is a great food choice versus the fast food offered at the food court

inside the mall. This restaurant has the ability to claim a large amount of shopper’s disposable income with its

offerings of prime steaks and chops. A good way to attract attention from the restaurant to our store would

be to place outdoor signs on the walkways around the mall promoting sales or the latest fashions. We could

also offer and promote a snack or appetizer for in-store shoppers, to encourage them to shop instead of

stopping to eat at a restaurant.

GEOGRAPHIC ANALYSIS

http://www.shopamericatours.com/destination/10648

17 ccnneighbors.com/documents/CCNNATrafficSurvey.doc

15

www.google.com

Medium to fast-paced traffic is located in the area surrounding Cherry Creek. Two major commercial centers

exist in Cherry Creek along the major traffic route of East First Avenue. First is an upscale, enclosed

shopping mall, the Cherry Creek Shopping Center (our store location), which anchors the neighborhood.18

Daily the area is moderately busy with foot traffic because of the size and popularity of the shopping centers

and the closely located country clubs and art galleries. The second is Cherry Creek North shopping and

dining district, which is a 16 city-block area with more than 320 upscale galleries, boutiques, restaurants,

salons/spas, and the Fillmore Plaza.

POPULATION GROWTH DATA

Population growth data shows that almost 1,000,000 people have moved to Colorado from 2000 to 2010.

The 2011 population in Colorado is estimated at 5,116,796, while in 2000 it was 4,301,261.19 Our store

location is a suburb of Denver which is also the 20th largest metro area in America and has the 10th largest

downtown area. 20 The population increase for Arapahoe County, which is where our store will be located,

has increased 17 percent in the last decade. This increases the population from 488,896 to 572,000. The

growth in Arapahoe County shows that the population has been thriving the past decade, benefiting our

H&M with an increasing consumer market.

18 http://en.wikipedia.org/wiki/Cherry_Creek_Denver 19 http://quickfacts.census.gov/qfd/states/08000.html 20 http://www.hometodenver.com/Stats_Denver.htm#pop

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MARKET SCOPE

The zip codes that are included in our market scope are 80214, 80246, and 80216. Some of the surrounding

cities are as close as 2.2 miles from the Cherry Creek Shopping Center21. Provided is a comparison of these

three zip codes with our store opening zip code, 80206, to understand and locate consumers that are in our

surrounding areas.

The first is Edgewater City, CO, which is zip code 80214. The recorded population for 2010 was 16148,

which is approximately 4,000 people less than Cherry Creek. The median age is 33 years old, which is slightly

below the median age for our location. The younger age bracket could appeal more to our store’s

merchandise. Median household income is$34,135, which is similar to 80206 with $40,87922. According to

Prizm, this zip code also contains American Dreams and Multi Culti Mosaic.23

The second is zip code is 80216, which is Glendale, CO. Population for 2010 is approximately half of the

population of Cherry Creek, with 10,701 people. The median age of Glendale is 26.6 years old, which is ten

years younger than the median age of the Cherry Creek population and the median household income is

about $10,000 lower, with $30,73524. Conveniently, this age and income still fall into our target market.

Prizm classifies this group as a Multi Culti Mosaic as well. It also includes Blue Chip Blues, which is a

younger demographic that has midscale income and children25. Even though the statistics and Prizm

segments differ slightly these consumers still fit into our target market.

According to Zipskinny, the population of North Washington Cdp, CO is 13,254, which is still not as high as

our location. The median age is also lower, at 30 years old, which still fits our target market. Household

income fits the income of the rest of the zip codes with $33,336. Zip code 80246, is a perfect match for

Prizm segments that appeal to our location. Their segmentation includes Multi Culti Mosaic,

Urban Achievers, and Money & Brains.26

The age and income levels are the target market we serve and we are confident that our new store location

will be successful based on our research. The populations are not high in these areas, but these are just a few

examples of the surrounding demographic and psychographic that will appeal to our new store location. The

high foot traffic received at the Cherry Creek Shopping Center and the heavy vehicle traffic along First

Avenue (this street parallels the shopping center) provide ample opportunities for consumers to become loyal

shoppers.

21 http://maps.google.com/maps 22 IBID 23 http://www.claritas.com/ 24 www.zipskinny.com/ 25 http://www.claritas.com/ 26 IBID

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Marketing Objectives

1. Attain a decrease in supply costs for the area

-August 2012- Coordinate with flagship location to get assets to new location

a. Layout shipping plan between flagship location, Denver, and new location, Cherry Creek

b. Discuss merchandise ordering and receiving schedule with flagship location

c. Coordinate appropriate order amount that can be shipped to our store

d. Schedule the order and pickup/delivery dates with flagship store and supplier

e. Maintain scheduled payments and the amount of merchandise in stock and share

information with flagship location

2. Extend the market penetration in the Denver, Colorado area.

-June 2013- The soft opening of our store will be the beginning to future pursuits of

expanded market penetration in the state of Colorado

a. To reach the population in the Cherry Creek/Denver corridor of 20,37227 according to

Zipskinny

b. Promote and advertise the new location during the Denver Arts Festival28 (Memorial

Weekend) and the Cherry Creek Arts Festival29 (Opening weekend)

c. Post comments about store opening and giveaways through Denver Pavilions (location of

flagship Hennes and Mauritz) Facebook Page30

d. Contact and update Denver Business Journal31 and Denver Post33 on the projected store

opening and events

3. Reduce Advertising Expenses

-July 2013- Following the grand opening, advertising expenses will already be in place

because of the flagship H&M in Denver

27 http://www.zipskinny.com/index.php?zip=80206&x=0&y=0 28 http://www.downtowndenverartsfestival.com/ 29 http://www.cherryarts.org/ 30 http://www.facebook.com/denverpavilions 31 http://www.bizjournals.com/denver/news/2011/11/10/photo-gallery-from-the-opening-of-hm.html 33 http://www.denverpost.com/business/ci_19787562

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a. Increasing the area the advertisements will be sent will increase the exposure both stores will

receive

b. Advertising for H&M has already been introduced to the public by the flagship store in

Denver

c. Combined advertising will reduce expenses

d. Request feedback from customers through online and in-store surveys about the

effectiveness of advertising

e. Reduce costs by advertising online through social networking sites, such as, Facebook,

Twitter, and H&M blog

4. Brand image is strengthened with the opening in this location

-December 2013- Customers will become loyal to the products sold by H&M

a. Brand is expanding in Denver area

b. Sponsoring local community activities and the Cherry Creek Arts Festival will get our name

out in the public and show our compassion and concern for our neighbors

c. This brand is growing rapidly worldwide, with it globally opening 168 stores last year alone,

and increased sales of 72% within the past 5 years32

d. H&M logo will signify the brand and store, reminding customers to come back

e. Our store will add the combination of fashion and affordability to the Cherry Creek area

5. Increase market share and build profitable relationships by developing better products.

-January 2014- Create more value for consumer by increasing products that are in demand

a. Product suggestion and satisfaction surveys will be made available online and in-store for

customers to give input

b. Expansion of H&M merchandise into ecofriendly beauty products

c. Increase availability of plus size fashion in Denver and Cherry Creek locations

d. Make quality organic merchandise available for the consumer

32 http://www.innovationleaders.net/hm_company_profile.html

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STRENGTHS

Fast fashion retailing increases the appeal for our H&M products

Trendy items offered at low prices helps our business thrive through the recession

Only 12 weeks for merchandise to go from design to retail state vs. the projected 6 months other

retailers use

Keep the store’s brands fresh with guest designers coming in for different lines in the store

Our unique brand creates very few threats from retail chains33

Increased addressable market with almost 2,500 stores located in 43 countries in the Asia Pacific,

Europe, Middle East & North Africa, and North America34

Cherry Creek is home to hundreds of shops, boutiques, art galleries, salons, spas, restaurants, and

everything else that caters to pampering 35

We are located 3.3 miles of, the 20th largest metropolitan area in the United States, Denver, CO36

We keep prices affordable by using very few middlemen and buy large volumes cost consciously

Cherry Creek Shopping Center already contains some of the most extravagant shopping in the

Denver area37

We are an affordable, worldwide company

With a College America Junior College and Art Institute of Denver located less than 6 miles from the

shopping center, our store provides convenience of location and price for student shoppers38

According to Zipskinny, the average household income in the area is 40k39

Clothing expenditures is above the national average in local area40

Located 17 miles from Denver National Airport, tourists are within a reasonable distance of the

shopping center41

33 http://voices.yahoo.com/swot-analysis-hm-company-3630037.html?cat=46 34 http://about.hm.com/content/hm/AboutSection/en/About/Facts-About-HM.html#cm-menu 35 http://www.denverrelocationbroker.com/cherry-creek/ 36 http://maps.google.com/ 37 http://www.shopcherrycreek.com/ 38 IBID 39 http://www.zipskinny.com/ 40 http://homes.point2.com/Neighborhood/US/Colorado/Denver-County/Denver/Cherry-Creek-

Demographics.aspx 41 http://www.shopcherrycreek.com/

20

WEAKNESSES

Excessive dependence on third party vendors for supply of merchandise

Median age for zip code 80206 is 36-38 years old 42

Buying large volumes means that there is no real guarantee that all the items will be sold43

Already low prices may have to be lowered in order to make room for next collections, which has

been an issue since Spring 2010, causing profit loss44

Company will have to pay more for extra storage for the items not sold

Our brand provides for a wide range of customers, including men ages 18-45, maternity wear,

children's wear, variety of clothing styles which can be difficult to manage especially in a vertical

company because there is no real focus on a target customer

Total crime risk in Cherry Creek is above the national average, according to Zipskinny data45

Four competitors are located in the same area, or within walking distance, from H&M’s projected

store opening location

OPPORTUNITIES

There is a growing market for plus size apparel for women in the US, which our store carries

We carry matching clothing for mothers and children, making it appeal to a larger crowd

We are adding opportunities in the job market for managerial and sales positions

We feature guest designers, such as Marni and Jimmy Choo, to increase our target market and

customer loyalty

Our company offers style advice and fashion updates through our website (HM LIFE)46

THREATS

High cotton prices and wages in Asia may impact H&M's margins negatively47

Weak consumer spending has been recorded in the US and Europe in previous seasons (Spring

42 http://voices.yahoo.com/swot-analysis-hm-company-3630037.html?cat=46 43 IBID 44 IBID 45 www.zipskinny.com/ 46 http://www.hm.com/us/life 47 http://mobile.bloomberg.com/news/2011-09-29/h-m-earnings-fall-less-than-analysts-forecast

21

2011) due to weather patterns not coinciding with the season48

Most sales are made in euro, while purchases are made in euro and US dollar, making fluctuation in

the exchange rates costly51

Uncertainties exist concerning how external factors such as raw materials prices, transport costs, and

the capacity among suppliers will affect buying costs for H&M’s products49

Changes in the global economy may change consumer buying behavior50

Buying costs may be affected by decisions at the national level on export/import subsidies, customs

duties, textile quotas, embargos, etc.51

A competitor, Gap, with their quality, reasonable prices, and loyal following of consumers

Discounting to shift unsold stock led to a drop in fourth-quarter profit has continued into January

2012) 52

Markdowns on merchandise have increased from the year before due to overstock

STRENGTHS

For the fourth quarter of fiscal 2012, total company net sales increased 9% over the same quarter last

year to $731 million53

All brands ended the year with inventory growth below that of sales growth54

Cleaned up inventories and shares rose almost 3 percent55

Ending inventories were clean, and on a comparable store basis, lower than the prior year56

For the fourth quarter of fiscal 2012, total company net sales increased 9% over the same quarter last

year

48 http://www.fashionunited.com/fashion-news/fashion/hm-sales-up-but-warn-of-excess-stock-201025063127 51 http://about.hm.com/content/hm/AboutSection/en/About/Corporate-Governance/40/Risks-

andUncertainties.html 49 IBID 50 IBID 51 IBID 52 http://www.reuters.com/finance/stocks/overview?symbol=HMb.ST 53 http://www.reuters.com/article/2012/02/09/idUS136742+09-Feb-2012+HUG20120209 54 IBID 55 IBID 56 IBID

22

Cherry Creek is home to hundreds of shops, boutiques, art galleries, salons, spas, restaurants, and

everything else that caters to pampering 57

They are located 3.3 miles of Denver, CO, which is the 20th largest metropolitan area in the U.S.58

Already contains some of the most extravagant shopping in the Denver area

Merchandise ranges from clothing to home décor

Serves as a one stop shopping experience for all things urban

Moderate pricing

Throughout the recession they have accomplished an increase in sales without excessive

discounting59

Operations spread across the US, Canada, and Europe

With a College America Junior College and Art Institute of Denver located less than 6 miles from the

shopping center, our store provides convenience of location and price for student shoppers60

According to Zipskinny, the average household income in the area is 40k61

Clothing expenditures is above the national average in local area62

Located 17 miles from Denver National Airport, tourists are within a reasonable distance of the

shopping center63

Total household expenditures are above the national average in local area64

Strategic brand positioning helps to cater to separate consumer groups65

Presence in multiple sales channels66

Direct sales, which are virtually all online, accounted for 20 percent of sales in 201170 Growth

in revenue is at 6.34 percent67

57 http://www.denverrelocationbroker.com/cherry-creek/ 58 http://maps.google.com/ 59 http://voices.yahoo.com/swot-analysis-urban-outfitters-company-4232629.html 60 IBID 61 http://www.zipskinny.com/ 62 http://homes.point2.com/Neighborhood/US/Colorado/Denver-County/Denver/Cherry-Creek-

Demographics.aspx 63 http://www.shopcherrycreek.com/ 64 http://homes.point2.com 65 http://www.fundinguniverse.com/company-histories/Urban-Outfitters-Inc-company-history.html 66 http://internetretailer.com/2012/02/13/direct-channel-grows-16-urban-outfitters 70 IBID 67 http://ycharts.com/companies/URBN/revenue_growth

23

WEAKNESSES

Recently criticized for unattractive merchandise at Urban Outfitters and sister locations, which led to

a build-up in inventory68

Promotional activity was significantly higher than planned, creating a larger expense for the

company69

Have no influence on the Asian market nor plan to make one in the near future

Asia is a developing market that they are ignoring

Competitors, such as Guess and H&M, have established themselves in Asian markets already

Other retailers that serve the same demographic are located within walking distance of Urban

Outfitters70

OPPORTUNITIES

Expansion into the Asian market

Growth opportunities offered by online retail channel

Improving product efficiency through investment in technology research71

Added opportunities in the job market for managerial and sales associate positions, which helps

promote the growth of the economy

THREATS

The Gap and Guess also markets to the same age range and has several retail stores worldwide and

targets the young hipster

Rising input costs because of shortage of cotton

VAT (value added tax) rate increase to 20% in the UK market, increasing taxes on Urban Outfitters

merchandise that is distributed to consumers and the production of merchandise in the UK72

Rising minimum wage rate in the US73

68 http://www.reuters.com/article/2012/02/09/us-urbanoutfitters-idUSTRE8181AX20120209 69 http://investor.urbn.com/phoenix.zhtml?c=115825&p=irol-newsArticle&ID=971682&highlight= 70 http://www.cherrycreekshoppingcenter.com/ 71 http://www.urbanoutfitters.com/urban/help/privacy_security.jsp 72 http://www.bbc.co.uk/news/business-12099638 73 http://smallbusiness.chron.com/raising-minimum-wages-hurts-us-employers-11744.html

24

Weak consumer spending has been recorded in the US in previous seasons due to weather patterns

not coinciding with the season74

A competitor, H&M, with their quality, low prices, and loyal following of customers

Competitors include, Abercrombie & Fitch, Gap, and Guess, which are also located at the Cherry

Creek Shopping Center75

Poor product designs and names have created discomfort for consumers and legal actions have been

taken by organizations (examples are “Navajo” products and St. Patrick’s Day themed t-shirts) in the

past76 77

74 http://www.fashionunited.com/fashion-news/ 75 http:/voices.yahoo.com/swot-analysis-urban-outfitters-4232629.html?cat=55 76 http://www.usatoday.com/money/industries/retail/story/2012-02-29/navajo-trademark-

urbanoutfitters/53299172/1 77 http://www.irishcentral.com/news/Urban-outfitters-st-patricks-day-products-disgrace-rages-on141761593.html

25

COMPETITORS

Express, Inc.

Express operates specialty retail stores internationally. Its stores offer apparel and accessories for women

and men between 20 and 30 years old across various aspects of the lifestyles, including work, casual, and

going-out occasions, as well as provides gift cards. As of January of 2011, the company operated 591 stores.

Negative reports are shown on Mergent Online of; 45% of trade experiences indicate slow payment(s) are

present and payment experiences exist for this firm which are greater than 60 days past due. Express clothing

store is located in the Cherry Creek Shopping Center, which is also where H&M will be located. They cater

to a smaller demographic than H&M which provides them with more opportunities to provide variety and

styles to the customer.

Forever 21

Forever 21 is an American chain of clothing retailers that carries women’s and junior’s clothing, accessories,

active wear, swimwear, lingerie, handbags, and shoes. Imitating both Korean and American fashion trends

and offering them at reasonable prices is a major part of the store’s image. Their marketing image is based

around made-in-the-USA merchandise produced in California and it sources its designs from hundreds of

Southern California suppliers. Forever 21 is located within walking distance of Cherry Creek Shopping

Center (approx. 0.1 mile).

26

A. Acquire Location

• Locate an area with space size of 2,500-3,000 square feet in ‘Old Town’ Fort Collins

• Meet with landlord to discuss lease and requirements

• Meet with accountants to create business budget

• Discuss historic, city, and state requirements with attorneys

• Have attorneys review the leasing agreement and dispute any issues with the landlord

• Obtain necessary permit/licenses to operate store in location

• Sign the lease

B. Bring in Interior Design Team

• Display ‘Coming Soon’ signs in windows, facing foot and vehicle traffic

• Research the interior layout of local competitors

• Consult with design company, if necessary

• Create store layout

• Locate and purchase lighting, decorations, furniture, and fixtures

C. Bring in Contractor

• Hire contractor and builders

• Build stock room, fitting areas, and cashier desk

• Install lighting and fixtures (After painting is completed)

D. Bring in Painters

• Hire painters

• Paint walls and fixtures white

• Paint select display areas

E. Merchandising

• Locate vendors

• Contact vendors about present and future order dates

• Set up a bi-monthly shipment schedule for merchandise with vendors

• Order merchandise racks and miscellaneous clothing display items

27

F. Locate Management Staff

• Advertise open management positions and prerequisites required

• Schedule interviews for prospects

• Set up training schedule for new management (4 weeks)

• Inquire about relocating a manager from another location to take lead at new location

G. Hire Employees

• Advertise job openings for sales associates and clerks in the local area

• Schedule interviews for prospects

• Schedule new employee training (2 weeks)

H. Set up Store

• Begin inventory on merchandise as it is received

• Organize and display merchandise throughout the store (on display shelves, mannequins,

tables)

• Hang banners that advertise the latest trend of the store (Top 10 Essentials, etc.) throughout

• Set up window displays for foot and/or street traffic

• Ensure all cashier stations, audio, and telephone connections are working properly

I. Soft Opening

• Open store 25 days prior to announced grand opening

• Record sales progress and customer satisfaction and demands

J. Promoting

• Various amounts in gift cards will be offered to the first 500 customers (Top prize being

$500)

• Apply for Cherry Creek Arts Festival (July 5-7 2013) sponsor program (Offer a donation

from the sales of the grand opening weekend to the not for profit mission, which is to

provide art experiences and support art education in local schools)

• Host a fashion show incorporating other fashion retailers in the shopping center (Urban

Outfitters, Forever 21, Diesel, Free People, Anthropologie, Juicy Couture)

28

K. Advertising

• Send invitations to exclusive personnel, including the people that helped create and set up

the store, celebrity homeowners in area, and local retail fashion businesses (10% off coupon

included)

• Display ‘H&M Coming Soon 07/05/12’ signs near the shopping center entrances and heavy

traffic areas near the shopping center

• Post opening information on H&M blog

• Contact local radio to promote the grand opening

• Become a sponsor for the Cherry Creek Arts Festival and gain access to advertising

opportunities

L. Grand Opening

• The opening will be celebrated with in-store gift cards for the first 500 customers

• Pass out promotions for local businesses at the Cherry Creek Arts Festival (Make it known

we care about our local businesses)

• Host fashion show from 11am-4pm on day of grand opening

• Have local artists and artwork displayed (with art education for classes) to show the culture

of Cherry Creek and promote the message of the Arts Festival

• Hair, makeup, and facial care demonstrations held by Bare Escentuals, La Biotique, and

Aveda

Business Opening

For the opening of H&M in Cherry Creek Shopping Center, we have planned a series of spectacular events.

The grand opening will begin at 10A.M. and will be celebrated in the passing out of in-store gift cards to the

first 500 customers; the top prize will be worth $500. Included with the gift cards will be flyers promoting

the Cherry Creek Arts Festival and the Marni for H&M charity T-shirts to raise money for disaster relief.

The headline for the flyer will be ‘We Care <3 H&M’. An hour after the grand opening we will be hosting a

fashion show in the center of the shopping center where the main foot traffic is located. Some featured

stores will be ourselves, of course, and Urban Outfitters, Anthropologie, Diesel, Free People, and Forever 21.

The fashion show will end at 5P.M. Beginning at 11 A.M. and ending at 4P.M. select local artists will set up

29

booths inside the H&M store to display their artwork and offer art education to children and adults to

emphasize the culture of Cherry Creek and promote the message of the Arts Festival. From 3P.M. to 7P.M.

there will be free makeup, hair, facial care, and henna demonstrations for customers at the entrance to our

store. Demonstrations will be held by businesses located inside the shopping center, including Bare

Escentuals, La Biotique, and Aveda.

• Store grand opening at 10A.M.

• Gift card and festival flyer distribution (10A.M. until limited stock is distributed)

• Host fashion show (11A.M.-5P.M.)

• Local artwork and classes (11A.M.-4P.M.)

• Hair, makeup, and facial care demonstrations held by Bare Escentuals, La Biotique, and Aveda

(3P.M.-7P.M).

• Store closing at 9P.M.

Communicating the Store Image

H&M portrays a hip, youthful image with an emphasis on affordability and fashion forwardness. We also are

moving towards using more eco-friendly products and helping the environment. The company is currently

switching to greener supplies and using fibers like organic cotton in our merchandise production. Including

the disaster relief t-shirts on our flyers and in our advertisements will encourage consumers to notice our

humanitarian side and get everyone involved in the aid for disaster relief.

The store image is also about being fashionable, beautiful, and trendy, which will be displayed during the

fashion show we are hosting to keep consumers informed of what the hottest styles are now. The skincare,

cosmetic, and hair demos are going to add the finishing touches to what our consumer needs to keep in the

know of what’s fresh and on-trend. Local artists are going to put the icing on the cake by promoting the

unique style and culture of the surrounding area of Cherry Creek.

30

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