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ZARA vs H&M

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by

Nikoleta Grajciarova

on 26 February 2014

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Transcript of ZARA vs H&M

ZARA
vs
H&M

Business Performance Management
Conclusion
different approach -> no ads budget for ZARA
delivery -> ZARA more flexible, online stores in more countries
both are profitable -> ZARA is more
both operating in debt -> more efficient way to finance
both are liable

BPI
Nikoleta Grajciarova
Jenna Seitz
Sonia Ourezifi
Lezandro Housen
Stan van den Berg
Adeim Suvanbekova
Financial indicators
Profitability
Solvency
debt to assets
debt to equity ratio

> 0,5 company goes bankrupt

Liquidity
current ratio
quick ratio

short time obligations
profit margins
return on equity
return on assets

ZARA
increase in profit
(14.0%-14.8%)
increase in ROE (17.61%-17.63%)
increase in ROA
(28%-30%)
H&M
slight decrease in profit
(14.3%-13.9%)
higher increase in ROE than ZARA
(47.4%-50.8%)
higher increase in ROA than ZARA
(34.7%-37.0%)

2011/2012
ZARA
both indicators lower
operating in debt
H&M
higher value of both indicators
operating in debt
2011/2012
ZARA
lower indicators -> less liable
H&M
higher indicators -> more liable
2011/2012
still able to pay off its liabilities
operating in debt - more effective way to finance
Customer indicators
customer satisfaction

Quality
Service
Price
Customer Retention

advertisement efficiency
Flexibility of delivery
ZARA
nonexisting budget
strategy : in- store experience

high brand recognition and popularity
H&M
3,5 % of gross sales
strategy : advertisement, celebs endorsement

2011/2012
ZARA
H&M
2011/2012
still able to pay off its liabilities
ZARA
very flexible : fast fashion
more developed online store worldwide (86 countries)
H&M
less flexible, longer collections
just in few countries (9)

2011/2012
Resources
Belle Kwan (2011). Spanish Domination- ZARA Brand Profile.
Available at: http://www.marketingmag.com.au/blogs/spanish-domination-6575/#.UwiNaigZI0. [Last Accessed 22 Feb 14].

Financial analysis. (04.02.2014). Wikipedia. Available at:
http://en.wikipedia.org/wiki/Financial_analysis. [Last Accessed 22 February 14]

H&M(2012). Hennes & Mauritz AB full Year Report 2011- 2012. Available at: http://about.hm.com/content/dam/hm/about/documents/en/cision/1922814_en.pdf. [Last Accessed 22 February 14].

Inditex corporate website (2014). ZARA. Available at:
http://www.inditex.com/en/who_we_are/concepts/ZARA.[Last Accessed 22 February 14]

Jake Kim (2013).Inditex valuation report.Available at:
http://www.academia.edu/4471346/Inditex_Valuation_Report. [Last Accessed 22 February 14].

Miles Socha (2013). H&M Unveils Latest Campaign for David Beckham Bodywear. Available at: http://www.wwd.com/media-news/fashion-memopad/steam-heat-7095949. [Last Accessed 22 February 14].

Profitability Ratios.(04.02.2014). Wikipedia. Available at:
http://en.wikipedia.org/wiki/Financial_ratio#Profitability_ratios. [Last Accessed 22 February 14]

Suleman Anaya (07.03.2013).Inditex E-Commerce Sales Soar. Available at: http://www.businessoffashion.com/2013/03/inditex-online-sales-soar.html. [Last Accessed 22 February 14]


Customer indicators
Customer Retention Rate
Number of customer complaints
Average time for customers to receive complete orders
Advertisement efficiency
Flexibility of delivery
Financial indicators
unit sales
return on investment
return on sales
market share percentage
unit cost
profitability
solvency
liquidity
financial performance
both are profitable
ROA- H&M
ROE- H&M
DAR 0.07-0.23
DER 0.11-0.34
DAR 0.26-0.27
DER 0.36-0.37

1.53 euros of liquid assets /1 euro of current liabilities
1.57 euros of liquid assets / 1 euro of current liabilities
Full transcript