The paper provides an overview on Hennes & A ; Mauritz ( H & A ; M ) , analysing the industry environment and the place in the retail market. The paper besides explores the impact of the recession upon the human resource direction activities, based on publically available inside informations of H & A ; M, which has been analyzed and presented within the context of the position.
The retail industry is normally a really dynamic, and a fast changing sector in the market. It represents one of the chief sectors in the UK economic system, in footings of employment, minutess and turnover, so that as a effect, it is a extremely competitory and a sophisticated industry. Thompson ( 2002 ) argues that economic conditions are an of import component in the industry and he states that they may impact the manner, weather easy or hard, a concern runs the activity successfully and profitable.Furthermore he claims that economic conditions may impact both capital handiness, cost and demand. Companies in the manner sector have to maintain all the clip the attending on supervising the market, and should seek to place any new tendencies every bit shortly as possible and, above all, they have to maintain up with the client ‘s increasing outlooks, demands and altering gustatory sensations.
As the paper shows above, the analysis will be on the Hennes & A ; Mauritz manner concern which is considered one of the universe ‘s front-runner and preferable interior decorators of apparels and accoutrements for adult male, adult females, adolescents and babes. In add-on, H & A ; M it ‘s besides known non merely for the manner cosmetics and accoutrements but besides because of the quality of the apparels, utilizing sustainable stuffs like organic cotton, wool and organic jean, all being environmental friendly ( H & A ; M web site ( 1 ) , viewed 20 October 2010 ) .
Harmonizing to the Datamonitor ( 2010, p.4 ) H & A ; M is a big vesture retail merchant with its operations chiefly set in Europe, North America, and Asia, having in 2009 1,988 shops world-wide and making gross revenues of 119 billion Sweden Kronor. ( H & A ; M web site ( 2 ) , viewed 20 October 2010 ) . The company ‘s chief office is based in Stockholm, Sweden and employs about 76,000 workers out of which more than 53,476 are on full clip employment as of November 2009. H & A ; M ‘s strategic attack is to offer interior decorator apparels to general population at low-cost monetary values, the company working with such trade name names as Stella McCartney, Karl Lagerfeld, Roberto Cavalli and Lanvin ( Capell & A ; Beucke 2005, p. 16 ; Kroll 2004, p. 71 ; Zimmerman 2009, p. D1 ; WWD 2010, p. 2 ) .
Recession IN RETAIL SECTOR
Presents about all sorts of industries are willing to keep their competitory place in the market during the recession period. Most of the challenges that the retail market faces are related to the economic and the fiscal facets. The manner industry faced unfavorable state of affairs due to the decrease of the money spent on apparels, but besides due to the alteration in consumers ‘ behavior.
Harmonizing to Kambil ( 2009 ) recession should last less than 2 old ages, and directors should take full advantage of this in order to rethink and regenerate their schemes and their competitory places in the UK retail market.
The UK retail market was merely one of the industries hit by the planetary economic downswing, as shoppers were forced to restrict their disbursement and consumer assurance was shaken by the failure of of import retail giants like Woolworth. With the retail market acquiring back on its pess in 2010 – peculiarly the on-line gross revenues section, where UK web gross revenues grew by 18 % in August 2010 ( BBC website, hypertext transfer protocol: //www.bbc.co.uk/news/business-11034030 ) , compared with the same month a twelvemonth earlier – one of the most urgent concerns is whether there will be long-run effects on consumer assurance or disbursement.
The retail industry has been an first-class subscriber to the UK ‘s economic system. Harmonizing to the British Retail Consortium, the retail sector is one of the 2nd largest employers in the UK, using 11 % of the UK work force, some 2.9 million people as of March 2009.
Historical groundss depict that the UK ‘s economic development has been dominantly fuelled by the successes in the manner industry particularly because of the being of 286,680 retail mercantile establishments in the UK ( British Retail Consortium web site ) . Over all these old ages, industrial success in fabrics and manner goods constituent have been important and can be attributed to the uninterrupted alteration and betterments in the life style of the shoppers and the increasing value being placed to such merchandises. Consumers invariably experimented different expressions, manners, cloths and thoughts and their involvement in manner accoutrements has been stimulated by high media exposure, which have been turning over the last few old ages. This sedulous rise in the consumer disbursement on manner merchandises led to practically undisputed growing in the industry.
Despite the crisis in this sector of the economic system, some of the organisations managed to turn their market portion. Harmonizing to Kambil ( 2008 ) companies need to concentrate their attending on the market portion and in add-on they had to establish new merchandises and adjust the bing 1s in order to better their dealingss with the clients. Using H & A ; M as a company illustration, they tried to crush the effects of the downswing, by establishing interior decorator apparels in partnership with well-know interior decorators like Jimmy Choo, Roberto Cavalli and Lanvin this November ( H & A ; M web site, viewed 21 October 2010 ) .
Furthermore the economic recession has affected many HR Processes and they needed to be adapted to the new economic environment and furthermore they had to be ready to confront the new world. The impact of the recession is non the same and many HR Processes can go on their regular operation without any accommodation. Even if recession has affected many manner administrations, shuting shops or cut downing monetary values, one of the large retail merchants runing on the UK market, H & A ; M, was maintaining rather good, in add-on they were opening shops, come ining new markets, and adding new trade names ( Spiegel website, April 9 2008, ) .
Another major consequence of the recession in the retail industry is the staff redundancies. Harmonizing to The Telegraph web site there is an of import retrenchment in this sector, which may impact retail administrations in many ways. The article shows that at the beginning of 2009 economic experts were denoting monolithic staff decreases between 100,000 and 135,000 occupations due to the “ badness of the lag ” . Furthermore the Chartered Institute of Personnel and Development predicted at that clip more than 600,000 occupations will be lost and many companies will be forced to stop dead their work forces ‘ wage.
Gross saless have been besides enduring by the economic downswing, describing a volume of retail gross revenues lower with 0.1 % than October last twelvemonth ( National Statistics Online web site, hypertext transfer protocol: //www.statistics.gov.uk/cci/nugget.asp? id=256 ) .
Among the factors that should be taken into consideration is the current economic growing rate in the state. This straight refers to an economic system ‘s rise in value of services or goods produced. Harmonizing to the Office for National Statistics ( ONS ) in the instance of United Kingdom, the economic growing rate in 2010 grew by 1.1 % in the 2nd one-fourth of the twelvemonth ( BBC website, National Statistics Online web site, hypertext transfer protocol: //www.statistics.gov.uk/cci/nugget.asp? id=256 ) .
Another economic factor that may act upon retail concern in the manner industry is the rising prices. Harmonizing to the BBC newspaper, the Consumer Price Index ( CPI ) , rising prices increased to 3.2 % in October from 3.1 % per cent in the old month ( BBC newspaper, hypertext transfer protocol: //www.bbc.co.uk/news/business-11784775, Appendix A )
SWOT Analysis of H & A ; M
Harmonizing to Armstrong ( 2004 ) SWOT is defined as “ ( Strengths, Weaknesses, Opportunities, Threats ) and is a popular model for developing a selling scheme. ” SWOT analysis is fundamentally done to happen out if they have sufficient resources to cover their failing and still accomplish their aim.
Hennes & A ; Mauritz AB construct its strengths by runing through complementary retail channels – shops, Internet, and printed catalogues.
Harmonizing to Datamonitor ( 2010 ) one of the important strength of H & A ; M Company is the petition for its merchandises which rise up the stock list turnover and enables low monetary value cut. Customer express their penchant for H & A ; M merchandise particularly apparels because of it ‘s quality at the best monetary value but besides because of the shops which are refreshed and reordered daily with new garments merchandises. Furthermore, coaction with interior decorator like Karl Lagerfeld, Stella McCartney, Roberto Cavalli and Lanvin this November, which are really good cognize worldwide, will better the desire for their garments, but besides will speed up gross revenues growing ( Business hebdomad web site, viewed 19 October 2010 ) .
Another major strength of H & A ; M is the presence on different markets such as Europe, North America and Asia with about 2000 shops ( H & A ; M web site ( 4 ) , viewed 20 October 2010 ) . This fact is a positive facet for the company because they can diversify their hazard, but besides ”be sustainably- financially, socially and environmentally ” ( CSR Report 2009 ) .
One of the most of import and noticeable failing that H & A ; M encounters is the section that the manner company marks. H & A ; M designs apparels for immature clients offering them the H & A ; M Divided and H & A ; M L.O.G.G aggregations. Second fact that can be taken into consideration as a failings is the shoppers base which is influenced by the macro economic environment in a negative manner ( Datamonitor 2010 ) .The article claims that H & A ; M focal point on the immature section of the market, which is one of the worst hit by the recession, with 21 % rate of unemployment for adolescents under age of 25.
First of all, one of the most of import chances that H & A ; M faces is the e-commerce. Harmonizing to Datamonitor ( 2010 ) H & A ; M online gross revenues grew by 22 % with 4.7 % of the entire retail online gross revenues in Europe. Furthermore the online gross revenues within more 17 European Countries ( such as France, UK, Germany ) are estimated to turn by 11 % each twelvemonth over the following five old ages. Even if the recession affected the retail industry, Hennes & A ; Mauritz opened in 2009 250 shops worldwide with 25 more than they planned. ( H & A ; M web site ( 3 ) , viewed 21 October 2010 )
Second of all, the enlargement plans 2010-1011 for H & A ; M intend to make a 10-15 % each twelvemonth. The Company tries to concentrate on markets like Asia where the gross revenues double over, China Japan and South Korea. ( Financial times website October 20, 2010 ) .
Another chance that H & A ; M takes full advantage of is the usage of organic cotton which classified the company in the top 12 planetary trade names and retail merchant utilizing organic cotton.
Menaces of the company are besides related to the economic recession because shoppers spend less money on apparels. Over the twelvemonth 2010 employment were expected to go worse, top outing towards the terminal of the twelvemonth at about 10.3 % and consumers were expected to use for benefits. Second major menace for the administration is the VAT which has been reduced in the UK in 2008 by 15 % and in January 2010 has been changed once more do 17.5 % . Apart of this alteration the cost for cotton has been modified as good with about 60-75 % by the terminal of 2009 and with 20-30 % during 2010 ( Datamonitor 2010, hypertext transfer protocol: //web.ebscohost.com/bsi/pdf? vid=20 & A ; hid=7 & A ; sid=4b01c02d-b8cf-414f-b787-7f93a0b69865 % 40sessionmgr113 ) .
Human Resource Management in a recession
The retail sector is one of the most hit by the planetary economic recession, so that directors should manage the effects of recession every bit professionally as possible in a downswing. But since when human resource direction is covering with the execution of the schemes and policies associating to the direction of persons, the section go one of the most responsible to convey the administration on the right path during recession clip. Harmonizing to Kambil ( 2008 ) there are some of import stairss that a concern should follow in order to keep their competitory place on the market. Some of these critical stairss are the betterment of monetary values in order to turn borders, the addition of the fiscal and operational efficiency, but besides the concentration on the market portion.
Harmonizing to Armstrong ( 2009, p.5 ) the intent of the human resource direction is to do certain that an administration is able to execute good through its staff, but besides to increase the efficiency and the capableness of the concern. Furthermore, it besides helps the concern to make it ends by utilizing the resources available to their best usage.
One of the first procedures affected by a recession is the recruitment choice policies which have been massively affected by the recession. Newell and Shackleton ( 2000 ) argues that enlisting and choice procedure involves doing expectancy about what will go on, so that determinations are made about who is the most suited individual for a certain occupation that can increase the public presentation of an administration. Now directors and enlisting bureaus are being excess careful who they bring in, and they prefer to rethink and implement new schemes in order to better their dealingss with the clients. In add-on, companies are even more demanding than earlier, doing certain that they recruit the best campaigner that can convey existent value to the company.
Another important consequence on human resource direction which impact an organisation in recession clip is the cost film editing. Retailers are witting about the state of affairs of the concern and seek to make everything to keep their competitory place on the market. They started to cut on the job hours, vacations, labor costs, and travel disbursals and they do n’t offer long-run benefits any longer. Harmonizing to Retail Week web site ( http: //www.retail-week.com/cost-cutting-the-lean-machine/1923604.article ) organisations needed to cut down its cost non merely to their shop degree, but besides to their caput offices.
The calling and development procedure have been besides affected by the recession, so that directors offer limited preparations to their staff. Choosing and developing employees with great possible, contribute to the addition of the gross revenues and administrations public presentation. It besides leads to a more structured calling way which ensures that staff has the necessary accomplishments to better the quality of services and merchandises of a company.
Introducing flexible working agreements and part-paid sabbaticals is another consequence of the recession that has a important impact on an administration impact on an organisation. Directors prefer to do these alterations, instead than implementing redundancy programmes, because it allows them to pull off every cost. This step eliminates the demand of engaging excess staff for busy periods such as Christmas or Easter vacations.
The operations are besides enduring due to the recession, because directors develop different channels which imply lower labor costs, such as on-line gross revenues.
A figure of retail merchants found more advanced ways to cover with cost film editing by presenting 9 twenty-four hours two weekss, cut downing day-to-day hours and offering unpaid sabbaticals, so we besides saw an upheaval in the petition for interim specializers to renegociate these new patterns.
The center of 2008 saw immense alterations for the UK retail industry, with the sector enduring a really intense downswing and several well-known trade names were vanishing from the high streets. But on the other manus there have been retail merchants that improved their public presentation during the recession. As seen above, H & A ; M is one of them, making a SEK 118,697 million turnover, and about 76,000 employments.
The human resource direction is one of the sectors that have been besides affected by the economic downswing. Harmonizing to Armstrong ( 2000 ) ”Human resource direction is a concept mostly invented by faculty members and popularised by advisers ” . So that many retail merchants took decisive actions, like concentrating and simplifying their operations by cut downing staff Numberss and costs, both through natural wastage and implementing redundancy programmes and flexible working hours.
Furthermore, there is now grounds of important alteration in the retail sector. In line with the slump in demand for goods non being every bit bad as had ab initio been feared, retail merchants are now re-evaluating and rethinking their HR schemes.
In decision, the paper demonstrates that the current economic conditions have provided the chance for the UK retail industry to larn and cover better with HRM constructions and recession, adding to what had already been in advancement before the economic downswing, which in bend shows an chance to do the concern stronger, successfully and profitable. Furthermore, there is a deficiency of standard makings across retail sector which is besides unfavourable.A Government policy in this country is ineffective and needs to be improved every bit shortly as possible.