& Other Stories: H&M targets upmarket shoppers
Hennes & Mauritz, Europe’s second-largest clothing retailer, will start selling its newest brand in stores and online simultaneously for the first time in the company’s history.
The “& Other Stories” brand of women’s shoes, bags and accessories will go on sale in the spring, the Stockholm-based retailer said overnight. It will be available at seven new stores dedicated to the label in European cities such as London, Paris and Milan, as well as online in 10 European countries, H&M said.
“The key difference is that '& Other Stories' is online from the outset, which in theory brings it to a wider audience,” Societe Generale analyst Anne Critchlow said. In terms of stores, it is a similar approach to the introduction of the retailer’s COS brand, she said.
The Swedish retailer is diversifying with a sixth brand after falling behind larger competitor Inditex in the race for the price-sensitive fashionista’s euro. Inditex, the world’s largest clothing retailer, has been pushing online business for brands including Zara. Last year, Inditex shares gained 67 per cent, while H&M rose 1.5 per cent.
“This diversification into other brands is nothing new for a lot of retailers and H&M is following in the footsteps of Inditex, which has diversified a lot,” said Planet Retail analyst Isabel Cavill. “They’ve needed to do this for some time because it was over-reliant on the H&M brand. They need to extend their reach to different shopper groups and create buzz and interest.”
Prices for “& Other Stories” clothes will start where H&M store prices end, chief executive Karl-Johan Persson said in September.
H&M, which opened its first store in 1947, introduced the higher-priced COS chain in 2007. COS sells jacquard trousers for 79 euros ($98) and heeled Chelsea boots for 150 euros.
“They’re looking for a different angle to the COS price range,” said Ms Cavill. “COS has a very distinct look and doesn’t necessarily appeal to everybody.”
H&M, which also owns the Monki, Weekday and Cheap Monday brands, is looking for more locations in major European cities to open “& Other Stories” stores, Kristina Stenvinkel, a spokeswoman for the clothing retailer, said.
H&M delayed the start of its online operations in the US in September last year after adapting to the market took longer than expected, Mr Persson said at the time.
“It’s beyond me why they haven’t launched online operations in the US yet,” Ms Cavill said. “In Europe, the service they offer online still doesn’t compare” to services offered by companies such as web retailer Asos, she said.
Despite a recent influx of overseas retail brands such as Zara into Australia, H&M is yet to open a store in Australia.
The fashion chain said last year that it would open an outlet this year in Santiago, Chile, its first shop south of the equator. At the time, Mr Persson said: "We see great potential for further expansion in this fashion-conscious region."
Inditex introduced Chinese internet sales for Zara in September last year and started online operations in the US for Zara Home and Massimo Dutti in October. The Spanish retailer gets more than 35 per cent of revenue from non-Zara brands, which also include Bershka, Pull & Bear and Stradivarius.
“Multi-brand strategy is definitely going to be a key point for H&M if they want to close the gap with Inditex,” said Ashma Kunde, an apparel analyst at Euromonitor in London. “It’s quite interesting that they have chosen to invest in an entirely new brand rather than pushing existing brands further. ‘& Other Stories’ seems to focus a lot on details and craftsmanship and really showing a more artistic approach to fashion, which is a complete paradox to H&M, which is all about fast fashion.”