Hanna Andersson Corporation

Hanna Andersson Corporation, founded in 1983 with the goal of bringing high-quality
European-style children's clothes to the United States, has been selling bright clothing and
accessories since then. Tom and Gun Denhart, husband and wife cofounders, established the
Portland, Oregon–based company by marketing imported Swedish apparel from their house.
The company, which is named after Gun's Swedish grandmother, currently generates over
$100 million in yearly sales and employs over 500 employees. Hanna Andersson began as a
mail-order catalogue company in the early 1980s, but now sells products online, in 29 retail
stores across the country, and through select specialized retailers.
Hanna Andersson has demonstrated its commitment to its employees over the years. All
employees, including part-time sales associates, are eligible for supplementary child-care
reimbursement. Part-time and flexible work hours, generous paid time off, and 8 hours of
paid volunteer time per year are among the additional advantages offered to employees.
Employees, on the other hand, feel like they are a member of the Hanna Andersson family. In
reality, many of the Denharts' employees were friends and family members at first.
The Denharts wanted to be a part of the company's decisions, and they wanted those
decisions to consider quality of life issues. "You will be more fulfilled if you can find a
balance between your career, community, family, and friends," Gun advises. Hanna
Andersson's concept was exemplified by the creation of HannaDowns, a garment recycling
program in which consumers can return used clothing in exchange for a 20% discount on
their next purchase. Hanna Andersson's altruistic spirit is evident in her current HannaHelps
initiative. By making gifts to schools and charity organizations, this program supports
children in the community and around the world. Hanna Andersson established ongoing
donations of 5% of pre-tax profits to charity that serve women and children under Gun's
leadership.
The company's substantial growth and development has not been without its obstacles and
required organizational transformation. Hanna Andersson faced various issues in the 1990s
and early 2000s as a result of increased rivalry from other stores and the emergence of online
commerce. The Denharts found themselves without a sound future growth strategy. They
were concerned that they had failed to consider market factors. Hanna Andersson needed to
change in order to survive.
Recognizing the need for assistance and direction, the Denharts were elevated internally to
assist in the implementation of change and strategic expansion, and Phil Iosca was named
CEO in 1995. In 2001, Hanna Andersson was sold to a private equity firm, and the company
has subsequently changed hands multiple times, resulting in a new corporate strategy. Hanna
remained on the board of directors until 2007, when Gun sold the company. From 2001 to
2006, she was the head of the Hanna Andersson Children's Foundation. The company still
collaborates with the company on community charity activities on occasion.
In 2002, the company started internet commerce and opened multiple retail outlets across the
country under Iosca's stable guidance. Hanna Andersson began supplying wholesale items
through retail partners like Nordstrom and Costco in 2009. Each of these new distribution
channels necessitated a significant amount of organizational change. "The growth of the retail
business required the greatest shift in our internal processes," says HR Vice President
Gretchen Peterson, "from both technical systems, to inventory planning and buying, to
distribution processes, to organizational communication and HR processes (recruitment,
compensation, and so on), as well as marketing communication programs." As the board and
owners debated the risks and rewards of retail development, tenured staff across the
organization found themselves in unknown territory, unsure of the company's future.
Thankfully, the changes were mostly mitigated by a stable leadership team. "From 1995 to
2010, we retained the same CEO (Iosca) and so, the face of the firm and the management
style did not alter substantially," Petersen, who has been with the company since 1994, adds.
When Losca stepped down as CEO in early 2010, Adam Stone, the company's chief
operating officer, took control. With calm demand for changes within the organization, he
assisted his company in through another shift. Stone routinely attended inventory and
operational planning meetings at Hanna Andersson to better grasp the diverse views. Stone
was able to break down business objectives step by step, making the continuing adjustments
easier for the organization and its valued workers. His presence, as well as that of other firm
leaders, has aided employees in making better and more strategic decisions over time. Rather
than rejecting change, people now believe they have been heard and understood.
The wholesale move paid off since it allowed the company to weather the recession's impact
on retail and online purchases. The company's wholesale division, which accounts for around
10% of overall sales, is forecast to see a 5% growth in yearly revenue. Through better
informed inventory purchases and effective distribution activities, Hanna Andersson was able
to achieve increased sales volume, smaller inventory at the end of the year, and fewer
liquidations. Despite this, management has done a good job of translating the owners' desired
growth goals while also motivating change within the organization. Hanna Andersson is
prepared for future growth and success with ongoing open communication, coaching, and a
readiness to explore new ways, all while remembering to look after her people.
References
Bauer, T. and Erdogan, B., 2020. An introduction to organizational behavior.
Courses.lumenlearning.com. 2022. Case in Point: Hanna Andersson Corporation Changes
for Good | Principles of Management. [online] Available at:

<https://courses.lumenlearning.com/principlesmanagement/chapter/3-1-case-in-point-hanna-
andersson-corporation-changes-for-good/> [Accessed 13 March 2022].
Dean, T.J. and Pacheco, D.F., 2014. Green marketing: a strategic balancing act for creating
value. Journal of Business Strategy.
Jones, P. and Kahaner, L., 2011. Say it and live it: The 50 corporate mission statements that
hit the mark. Currency.

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Hanna Andersson Corporation, founded in 1983 with the goal of bringing high-quality

stores across the country, and through select specialized retailers.

Andersson's concept was exemplified by the creation of HannaDowns, a garment recycling

change in order to survive.

collaborates with the company on community charity activities on occasion.

distribution processes, to organizational communication and HR processes (recruitment,

organization found themselves in unknown territory, unsure of the company's future.

Bauer, T. and Erdogan, B., 2020. An introduction to organizational behavior.

Courses.lumenlearning.com. 2022. Case in Point: Hanna Andersson Corporation Changes

for Good | Principles of Management. [online] Available at:

andersson-corporation-changes-for-good/> [Accessed 13 March 2022].

value. Journal of Business Strategy.

hit the mark. Currency.

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