Inside The H&M Fashion Machine

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One of H&M's most important assets, say those who observe the sector, is its corporate culture, which encourages flexibility and adaptation. A recent program to even out inventory levels boosted H&M's gross margin by a remarkable 3 points, to 55%. (Gross margin is a key measure of how efficient a retailer is at its core business of selling goods.)

Henrik Schultz, chief analyst at Danske Equities, praises the way H&M has handled its international expansion and says the key silhouette he sees in the future is the dog bone: bulging growth for less expensive fashion like H&M's at one end and for luxury apparel at the other end but thinning prospects for brands priced in the middle.

Fast-forward several decades, and try to predict what historians will choose as the representative fashion of our decade. Will it be the ubiquitous Gucci ads featuring Amazons in tight leather? Nicole Kidman's haute couture Oscar gown? Probably not, says Van den Bosch. "If you don't see it on the people, it won't be a fashion."