4 ms·
H&M’s operating margin is at 10%. It seems that many clothing retailers are somewhere around that point. 100× doesn’t even work as hyperbole for me. H&M likely
by arrrg 8y ago
H&M’s operating margin is at 10%. It seems that many clothing retailers are somewhere around that point. 100× doesn’t even work as hyperbole for me. H&M likely wouldn’t even survive a 2× reduction in clothing prices.
Which is not to say that H&M (or others) are blameless in this. It’s more to say that this is a structural issue.
- close04 8y agoThat's because while the clothes themselves are sold for 10x or 100x the price they cost to make (which is dirt cheap, these stores pay the sweatshops close to nothing), the difference is spent on having stores in high rent areas in most cities. This is part of the branding strategy for stores like H&M or Zara. Many of the items on sale are of similar (or slightly better) quality with what you find in cheap outlets at the edge of the city, even the ones that sell en-gross. But having a store in an affluent part of town gives them more credibility and a better image.
- arrrg 8y agoWhich, again, hints at a structural problem (and gets the Marxist inside of me all tingly). Because capitalism H&M can’t move those stores elsewhere.