Price War in Fast Fashion: H&M's Clever Strategy Amidst Tariff Storm
New York, vrijdag, 27 juni 2025.
H&M challenges competitors with a bold pricing strategy in the American market. While Zara and Shein raise their prices due to import tariffs, H&M maintains stable prices. The company compensates for higher costs by smartly restructuring its supply chain, shifting to suppliers in countries like Turkey, Egypt, and Morocco. This approach allows H&M to remain competitive and gain market share. Data shows that Zara’s prices have risen by 28%, while H&M’s prices have actually dropped by 3%. CEO Daniel Erver sees this period as a strategic opportunity to understand consumer sentiment and operate flexibly in a turbulent trade environment.
H&M’s Strategic Pricing Approach in a Turbulent Market
In the rapidly changing world of fast fashion, H&M distinguishes itself with a bold pricing strategy in the American market. While competitors like Zara and Shein are forced to raise their prices due to import tariffs, H&M maintains stable prices [1][2]. The company has around 500 stores in the United States, which corresponds to 13% of its total revenue in 2024 [3].
Price Differences in Focus
The price differences are remarkable: Zara’s average prices in the US have risen by a full 28% in June 2025 compared to a year ago, while H&M’s prices have actually dropped by -3% [1][4]. CEO Daniel Erver acknowledges the challenges: ‘Different competitors are responding in different ways, some more aggressively, others more cautiously’ [2].
Supply Chain as a Strategic Weapon
H&M’s successful strategy revolves around smart restructuring of the supply chain. In the past 18 months, the company has consolidated its supplier base, focusing on a smaller number of large suppliers with factories in multiple countries [5]. As part of the ‘nearshoring’ strategy, H&M is seeking suppliers in countries like Turkey, Egypt, Jordan, and Morocco [6].
Future Perspective
H&M’s approach allows the company to remain flexible in an economically challenging environment. By not fully utilizing production capacity at suppliers, H&M can quickly scale up for popular items [7]. This strategy makes the company resilient in the midst of the ongoing tariff storm [8].