Please see that we are going to establish a comparison between the 2 biggest fashion cos. all over the world, I mean, the swedish H&M against the spanish Inditex.

When a comparison in terms of size is made, we can see how Industria de Diseño Textil (INDITEX), is beating the swedish one in all KPIs analyzed. H&M is approaching in sales and gross profit, but far away in the rest of size KPIs.

 

As analysis tool contains only 2 cos. within H&M and INDITEX specific segment, we have inlcuded other cos. belonging same industry located in reference economies, such as: France, Germany, Italy and the United Kingdom.

Regarding analysis extracted (Enterprise Ranking based on inventory days), important to say that this will be showed in 2 slides, in order to see figures for cos. of interest.

        

H&M is in the middle of the ranking with an inventory days over 120, and INDITEX is the last one (the 1st one indeed, as the lower the figure, usually the better).    

The table before is giving to you a comparion from a different perspective now, I mean, efficiency.

Beside data delivered before (inventory days), one more time INDITEX is beating H&M in rest of KPIs offered, as is doubling the asset turnover days, which in is a ratio measuring the efficiency of how well a company uses assets to produce sales. Please notice that a higher ratio is favorable, as it indicates a more efficient use of assets.
 
Finally, we can see a reason why how INDITEX is more efficient than H&M, and is because being its sales higher, their cost of sales are much more lower.

This analysis is showing to us inventory days along time, where INDITEX is beating their competition all the time, and a new KPI offered, which is the revenue per head.

One more time INDITEX is winning, as for this KPI is doubling H&M figures with exception of 2020, where H&M kept the ratio through pandemic period, while INDITEX delivered a poorer figure. Why? Or INDITEX decreased their sales more than its competitor in that period, or they had a higher (than previous) number of employees than H&M.

Pandemic hit every company, and made ecommerce grew highly in a short period of time. INDITEX was as prepared as H&M for online sales as they had been invested in that area. Therefore, we think that reason why was likely linked to keep staff during that period of time, leveraging in their costs, that they were lower as for some KPIS analyzed before were lower.          

As done previously, and because of data scarcity, we included in this analysis, cos. belonging to same specific industry than H&M and INDITEX in European countries of reference.

When comparing INDITEX against the market "built", we find how all ratios are positive or neutral. Please that there a couple of them in red, although reality is that they are positive, because the lower, the better.

In 


It provides an indication of how the firm finances its assets. A high result indicates that a company is financing a large percentage of its assets with debt, not a good thing. The upper acceptable limit is 2.00 with no more than 1/3 of debt in long-term liabilities. The lower the ratio, the better.

   

H&M figures are fine, becuase they have or good or neutral (no negative because of same explanation given before). However, they don't hava as many as positive or ratios above 90th percentil than INDITEX.


To summarize we have 2 cos with a very good performance in the fashion industry, although INDITEX is number one and absolute leader of the market.