H&M Europe's Fashion Favourite?

The Swedish fashion chain Hennes & Mauritz is about to pass Marks & Spencer and become Europe's biggest clothing retailer. A report by the market research group Mintel says that H&M will become the new M&S within a year if the Stockholm-based chain keeps up its current strong rate of growth.

While H&M boosted its sales by more than 70% between 1999 and 2003, neither M&S - Europe's largest clothing retailer - nor second-placed C&A increased sales in that period, Mintel said. "With H&M performing that much stronger than both C&A and M&S, it will not be long before H&M is crowned king of clothing."

H&M is one of two companies that have far outperformed the rest of the sector in recent years. The other is the Spanish Inditex group, which owns the Zara retail chain. Esprit and Matalan also stood out from their peers in terms of sales growth, Mintel said. "What sets these chains apart is their flexibility and speed in terms of turnaround from design to product to shop floor. Younger, fashion-conscious consumers have come to expect these dynamic, flexible techniques."

The study also shows that clothing still accounts for more than half of consumer spending in most European countries, but that supermarkets are taking a larger share of the market. Asda and Tesco took almost 5% of the UK clothing market in 2003 and Tesco is now the number one clothing retailer in the Czech Republic and a major player in Hungary. (The Guardian)