H&M's Strategic Move: Sourcing Closer to Key Markets

H&M is shifting its supply chain strategy to source more from suppliers nearer its key markets in Europe and the U.S. This is a move to mitigate potential U.S. import tariffs and increase supply chain resilience. The strategy includes sourcing more from Central America, Turkey, and North Africa.


Devdiscourse News Desk | Updated: 30-01-2025 18:00 IST | Created: 30-01-2025 18:00 IST
H&M's Strategic Move: Sourcing Closer to Key Markets
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Swedish fast-fashion giant H&M is revamping its supply chain to source clothing and accessories closer to its principal markets in Europe and the U.S. This strategic pivot, disclosed by the company's finance chief Adam Karlsson, aims to brace against potential import tariffs from the U.S. and enhance supply chain resilience.

Karlsson emphasized the need for a regionalized supply chain, citing geopolitical concerns and lessons learned from the COVID-19 pandemic. He acknowledged potential U.S. tariffs as a pressing issue, prompting the retailer to consider suppliers based nearer to the U.S. market. This includes exploring options in Central America for U.S. and Brazilian markets, while seeking suppliers in Turkey, Morocco, and Egypt for Europe.

The backdrop to H&M's strategy is heightened scrutiny and potential trade barriers, a situation exacerbated by past tariff threats from former U.S. President Donald Trump. Although tariffs loom as a concern, Karlsson stated that H&M's broad sourcing network provides a strategic edge. The U.S., forming a significant portion of H&M's market, accounted for 14% of its total revenues in 2023.

(With inputs from agencies.)

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