Just like you might not know that your ranch dressing, lip balm, and drain cleaner are all owned by the same company, you could soon be buying clothes from multiple stores, all owned by fast fashion mega-retailer H&M.
The idea of multiple retail brands being owned by the same parent company isn’t new — just think of the Gap, Old Navy, Banana Republic arrangement — and H&M has been dabbling in recent years with a few smaller-format store brands like Monki and the confusingly named & Other Stories.
According to Bloomberg, H&M’s intention with its growing portfolio of retailers, is to compete with fashion brands with speedier supply chains like Zara, whose owner Inditex has had success with its slew of other brands under its umbrella.
For example, H&M’s COS — Collection Of Style — stores, which are more about quality and not so much about teen fashions and bargains. Similarly, the & Other Stories brand targets shoppers willing to pay a premium.
H&M is also branching out into the home goods category with a new brand called Arket — the Swedish word for “sheet of paper” — launching this fall in London. The company says will be a “modern-day market that will offer essential products for men, women, children and home,” and will feature in-store cafes with Scandinavian fare. So kind of like IKEA, but with clothing.
“This isn’t like anything else we have,” H&M Chief Executive Officer Karl-Johan Persson told Bloomberg. “It’s a completely different expression.”
Arket will sell products priced slightly higher than H&M’s main brand, and will also sell non-H&M brands.
“We really believe it’s relevant to a modern customer to bring different brands together — under one roof, under one channel — and to make that choice for them and also make it more convenient,” Ulrika Bernhardtz, Arket’s creative director, told Business of Fashion recently.
In addition to Arket, H&M is planning to open 80 more locations under its smaller brands this year, along with 350 new H&M stores.
H&M has had a particularly tough time competing amid the ever-changing tides of fast fashion, and as a result, the company has had to resort to steep discounts to get rid of all the inventory it hasn’t been able to sell quickly enough.
Will the multibrand concept work? It isn’t a bad idea, one analyst tells Bloomberg, but it’s more important to fix what’s wrong with the flagship brand.
“What’s absolutely necessary is to return to growth in existing locations at H&M,” Bryan, Garnier & Co. analyst Cédric Rossi says. “Without this, the business isn’t sustainable.”