H&M's purchasing profits

18 October 2006
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19 October 2006 | Paul Snell

A "more efficient purchasing process" has boosted sales and profits at H&M, according to the retailer.

The Swedish clothing firm saw sales between June and August increase by 11 per cent, rising to 16.75 billion Swedish kronor (SEK) (£1.2 billion).

The company also saw profit rise 13 per cent, to SEK 3.79 billion (£274.2 million), in the same period.

A spokesman for the retailer told SM: "Two years ago we had a reorganisation in the business, and we split our buying office into two parts.

"One part is located in Stockholm and focuses on buying and design. The other is located close to our suppliers in 22 offices and focuses on sourcing and production.

"It has led to better clarity in work and responsibility between purchasing and production."

The buying and design team is responsible for choosing which clothing to buy, and the production team handles sourcing and negotiating deals with suppliers. The retailer added it had been helped by good relationships with suppliers and lower prices that led to better economies of scale.

SMoct2006

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