While some retailers continued to be vulnerable to cost-cutting, swingeing redundancies and store closures in 2010, others acted swiftly to respond to the changing economic circumstances, offering real value to their customers and embarking on ambitious international expansion.

WINNERS

H&M
The Sweden-based retailer expanded across the world this year, planning to open 220 new stores, mostly in western Europe and the US. Hennes & Mauritz' (H&M) third quarter sales of SEK26.89bn (US$4bn) showed a sharp 14% increase on the previous quarter. First quarter profits were better still - up 42%, through strong sales of spring fashions, albeit helped by an early Easter. September saw the launch of H&M's UK e-commerce store including a tie-up with influential brand Lanvin. Meanwhile the Swedish firm moved closer to its goal of sourcing all cotton from sustainable sources by 2020. A sustainability report released in April said the company's garments contained 8,500 tonnes of organic cotton in 2009.

Zara
The Spain-based brand caught up with the rest of the world and finally embraced the Internet in 2010, leaving analysts asking, 'what kept you?' Owner Inditex launched Zara online in Spain, France, Germany, the UK, Italy and Portugal in September, amidst plans to follow up with Internet sales in South Korea, Japan and the United States in 2011. Forecasters have said Zara online sales could be worth EUR2bn (US$2.5bn) per year. So what would they have been worth in 2009, or 2008 for that matter? And in another milestone, a first Zara store in India was opened in May, in the capital New Delhi.

Wal-Mart
The American juggernaut rolled on around the world in 2010. Its investment budget remains staggeringly large - spending for the fiscal year to 31 January 2011 was projected to be from $13bn to $14bn, up from $12.2bn in 2009. And Wal-Mart is spending smart. This capital expenditure budget will focus on developing emerging markets, with its international growth focused on China, Brazil and Mexico. Meanwhile, Wal-Mart confirmed in July it would introduce electronic RFID tags for individual garments, helping the company better track stock.

Burberry
After receiving flack for outsourcing production from Wales, Burberry showed its mettle as a global brand in 2010 when buying out its China franchise partner Kwok Hang Holdings Ltd for GBP70m (US$107.7m) in a move intended to pave the way for its expansion in the Chinese market. Burberry has revealed ambitions to have 100 China stores: it already has 50, and now owns them direct. Burberry also continued to take tough restructuring decisions. It narrowed operating losses in Spain to EUR3.1m in the first half of 2010, down 25% from a EUR4.2m loss the previous year, for instance.

Li & Fung
OK, so Hong Kong's Li & Fung is not strictly a retailer, but this wholesaler and distributor is integral to the success of many big high street names selling China-made wares. And 2010 was a good year for Li & Fung. Even a faltering US recovery enabled it to post a 55% hike in first half net profits and a 12% increase in revenues. In February, it announced a deal with Wal-Mart to act as buying agent for goods valued at $2bn for the first year. Cash rich, it acquired US shoemaker Jimlar and Hong Kong-based Integrated Distribution Services (IDS) in August and Oxford Apparel in November. Li & Fung's share-price rose steadily and was up 50% this year in December.

LOSERS

Marks & Spencer
As goes Britain, so goes Marks & Spencer, its biggest clothing retailer. And while the UK emerged from recession in 2010, and M&S posted some better than expected sales figures, its senior management knows that the British economy remains very fragile, especially with the government slashing public spending. And 2011 could be tough for all UK clothing retailers. Soaring raw material costs and rising Asia wages caused UK clothing and footwear prices in September 2010 to rise year-on-year for the first time since 1992, up 0.9%. And there was a huge 6.4% monthly increase between August and September this year. With Sterling continuing to be weak, major retailers such as M&S could have a tough time next year.

American Apparel
The vertically integrated US brand American Apparel had a torrid time in 2010. It received a New York Stock Exchange warning for failing to file a quarterly report on time, and it has witnessed sloping sales and rising debt, reporting a Q2 loss of US$14.7m. It split with former auditors Deloitte Touche, resulting in a threat of legal action from law firm Levi & Korsinsky. And it received a subpoena from the US Attorney's Office in New York, plus an enquiry from the Securities and Exchange Commission. Then there was an immigration crackdown at its Los Angeles factory, forcing the company to hire more than 1,600 new workers, hitting production efficiency. The silver lining? Things can only get better in 2011. But maybe not.

Faith
This year did not witness the industrial carnage of 2009, with long-established brands going bust and closing plants aplenty. But there were casualties nonetheless. UK shoe chain Faith entered administration in April, after it had been on the market as a going concern for weeks. There were no buyers for Faith as a solvent business - administrator Mazars said "several parties have shown an interest and offers have been made," but no rescue deal was sealed. So, all 78 stand-alone stores were closed between April and June, while chain Debenhams agreed to purchase the 115 concession outlets already in its department stores.

Ethel Austin
The UK-based value clothing chain escaped closure for the second time in 18 months this year and again its saviour was former owner Elaine McPherson. Her Life & Style Retail Ltd in March bought Ethel Austin, which had been placed into administration in February with sales being pressed by the tail end of the recession and competition. McPherson had rescued Ethel Austin in 2008, before it fell into trouble again at the end of 2009 and early this year. Under the latest deal, 90 stores were to stay open, while the remaining 41 would be shuttered.

Adolfo Dominguez
Spanish retailer Adolfo Dominguez reflected its home country's continuing economic struggles in January by posting a EUR3.5m (US$5m) loss for the first nine months of its fiscal year and closing 59 stores to restructure its business. That followed a EUR.2.68m profit in the same 2008 period. The company blamed Spain's sharp consumer downturn for the losses and they continued in 2010. In November, Adolfo Dominguez announced doubled year- on-year first half fiscal losses, hurt by weak sales during Spain's spring/summer season and flagging sales across its distribution network which includes outlets in leading department store chain El Corte Ingles.

By Keith Nuthall.