duce clothing quickly from the design stage to final production in the most efficient and timely methodology possible, with an emphasis on providing unique fashion designs to fit the needs of a changing consumer culture (Hines and Bruce 2001).
H&M creates clothing known as being boho-chic, providing merchandise offerings with a hippie flair and Bohemian styles that have been heavily promoted by reputable celebrities such as Kate Moss. The retro appeal of H&M’s offerings inspire youths with a need for chic and in vogue, exclusive products. The ability of H&M to blend celebrity endorsements from reputable youth-oriented famous persons has built a potent and recognisable brand, giving the business considerable brand equity as a pioneer in providing relevant fast fashions.
It is this brand equity that will now allow H&M to expand its product line to include a new food offering, branded under the H&M established brand reputation. The company will be launching gourmet chocolates and specialty, gourmet candies known as H&M Sweet, an effort to improve revenues and gain even more brand preference for the H&M brand name.
In the UK, the corporate tax rate was lowered from 22 to 21 percent in 2014 (Sharma 2012). This provides one of the lowest corporate taxation rates across the world, which will provide H&M with more financial capital earned through revenues. This lowering of corporate tax rates provides an environment where H&M Sweet can recapture the costs of new product development, production, distribution and marketing.
To the disadvantage of the company, the UK Value Added tax increased from 17.5 percent to 20 percent. As a result, H&M will now have to hold 20 percent of its earnings to ensure compliance with this recent change in legislation. There are no corporate-oriented exceptions to the Value Added Tax increase, therefore H&M may have to engage in hedging activities as a means of offsetting this increase in taxation expenditures annually.
Additionally, H&M ...Show more