MERCHANDISING POLICIES & 6 MONTH BUYING PLANPRESENTED BY:CHHAVIKARTIKANEELAM SAMMARTH SOWMYATRIPARNA

Introduction

• 1947 Hennes open as Women’s clothing store in Vasteras, Sweden.

• 1964 First International store opens in Norway.• 1968 Launch of kid’s and men’s lines.• 1972 Known as H&M, Hennes develops a cosmetic

line• 1998 H&M joins the online market.• 2013 Global online shopping.

Product Line

H&M

Men wear

Women wear

Kid’s wear

Accessories

Category

Chosen• Women’s

Sportswear• Women’s Active

Wear

Strengths

• Cheap fashionable clothing• Location of the stores• The number of stores they

have• Good marketing• High barriers to market entry• Operate on a global scale• High growth rate

Weaknesses

• Poor quality/finish to clothing• Competitive market• Sourcing and operating in so

many of their clothes in other countries can lead to lack of quality control with clothing and staff

Opportunities

• Online shopping• Emerging markets such as

India and China

Threats

• Rising labor costs• Global competitors

SWOT ANALYSIS

STAFF POLICY

Guidelines to adhere to:

• Must adhere to store timings Business Hours: 9 am – 11 pm

• Must be dressed in semi -formals, applies to both Genders

• Strict adherence to guidelines placed in the Ethical book of Conduct

Benefits offered to staff

• Shop for even less: 25% flat discount to all staff

• Benefits from shared success: Any donation received from the organization from upper management is distributed equally to all staff members

• Training & Development• Health & Well Being

E-RETAIL POLICIES

• Implementation of internet cookies (Invasion of Privacy):

“WE USE COOKIES: H&M uses cookies to give you the best shopping experience. If you continue to use our services, we will assume that you agree to the use of such cookies. Find out more about cookies and how you can refuse them.”

• Refunds for online purchases: “If you mail in your return, you will receive an email confirmation. Please allow up to 2 weeks for the credit to be reflected in your account. Allow up to 2 billing cycles for the credit to appear on your credit card statement.”

RETURN & EXCHANGE POLICY

• Returns with Original Receipt: Unwashed, unworn or defective merchandise may be returned within 30 days of purchase date for a full refund. All returned items must have the tags attached, along with the original sales receipt.

• Returns without a receipt: Merchandise returned after 30 days or without the original sales receipt will require a valid photo ID. These returns will be refunded with an H&M merchandise credit at the current selling price, usable on future H&M store purchases.

• Final Sale: Gift card purchases and discounted final sale merchandise is not eligible for return or exchange.

• This Privacy policy only concerns H&M customers and users of its online services.

• They have a policy setting out how personal data will be processed and protected. Any changes made to this Privacy policy can be found by visiting online.

• The Swedish parent company, H & M Hennes & Mauritz AB ( “H&M”), is the Controller of the personal data and therefore responsible for the personal data under the Swedish Data Protection Act (1998:204) and EU Directive 95/46/EC.

• The Indian company H & M Hennes & Mauritz Retail Private Limited is the personal data processor and processes the personal data on behalf of the parent company.

• Personal data is stored in EU and might be disclosed to subsidiaries within the H&M group. This means that data, in a few cases, can be processed outside the EEA-area. In any event of transfer of personal data to a Country outside the EEA-area, the involved H&M subsidiary will guarantee the application of the standard contractual clauses regarding data privacy process approved by the EU.

PRIVACY POLICY

• H&M Customer Service does not handle inbound payments to H&M. They will never call asking for payment information. Also never ask to give personal information via email.

• If a customer ever receives an email asking to give specific personal data via a link, they are asked not to reply to the email and click on the link. They are asked to delete the email immediately.

• CONTACT By Phone 4008-215-500 Opening hours Monday-Sunday: 09:00-22:00 By E-mail customerservice.cn@hm.com CUSTOMER POLICY

QUALITY POLICY

H&M places special emphasis on the, quality of its products making sure that the products meet or exceed the customers' expectations. Some tests included by H&M:

• Washing- shrinking and colorfastness• Pilling• Flammability• Chemicals• Buttons and Details

PROMOTION POLICY

6 Month Buying PlanDepartment: Women’s Active

Wear

Objective of Buying plan

• The six month merchandise plan is a tool that translates profit objectives into a framework of merchandise planning and then control.

• The main objective of creating this plan is to prepare a month by month purchasing schedule for retail organization.

• Formulation of objectives, establishment of policies and implementation of procedures for a season.

Points to be kept in mind

1) Prepared in advance of the selling season

2) The language should be easy to understand

3) The economy is ever changing, the merchandiser budget must be planned for a relatively short period of time six months is the normal norm.

4) Should be flexible enough so that changes are not impossible.

Components of a Buying plan

BUYING PLAN

Planned sales

Planned purchases

Planned reductions

Planned markdowns

Shrinkage

Planned stock

Planned Sales

• Planned sales are the projected sales for the period that is being planned for.

• After careful analysis of past sales record and current market conditions, it is estimated that a 15% increase in sales will occur this season.

15% increase from the last years hypothetical sales figure.Therefore,Current year’s sale = Last year sales * 115%

E.g. - 10, 00000*115%= 1150000

Planned Stock (BOM)

• Planning of the merchandise stock for the season, according to the anticipated sales.

• Method used is STOCK SALES RATIO.

Assumption= Stock to sales ratio of this and last year = 2

Calculation= Sales*STS Ratio= B.O.M Stock

E.g. = 265000*2 = 530000

Markdowns

• It is the difference between the original retail price and the actual selling price.

• Markdown dollars are calculated by subtracting the Actual Selling Price from the Original Selling Price.

• Assumption: Markdown (last year) = 11%

• Markdown (This year) =10%

• Calculation = Sales* Markdown %

• E.g. = 265000*10% = 2650

RETAIL PURCHASES

• Retail purchases for each month is calculated as below:

•Calculation= (Planned sales +Planned stock E.O.M+ Planned markdowns)-(Planned stock B.O.M)

•E.g. =26500+466400+26500-530000=201500

COST PURCHASES

Cost purchases for each month is calculated as below:

• Assumptions: Markup percentage = 55% for planned year.

• Calculation: Retail purchases* (100-markup %)• E.g. =201500* (100-55%) =90675

End of month stock (E.O.M)

• The opening inventory of the next month would be the E.O.M stock of the previous month.

• E.g. the E.O.M of February is the B.O.M of March

CONCLUSION

• With the Women’s active wear industry on the rise and more people being fitness fanatics, the H & M’s Women’s active wear department can plan an increase in the following year.

• Purchases semi-annually make it difficult for the department to determine specific orders and it would be easier if H & M makes purchases more often. A more in-depth inventory system would be beneficial.

THANK YOU!