The Swedish group Hennes & Mauritz has begun an experiment to sell third-party branded products in its own H&M chain stores.
For one of the largest fashion retailers in the global market, this is a significant change in strategy with the ability to compete with multi-brand online stores such as Zalando and ASOS.
Previously, third-party branded products began to be sold in H&M-controlled stores & other stories и Arket. H&M notes that the expansion of the offer and the introduction of new brands into the assortment will allow the company to attract a new consumer audience. Other details of the pilot project in the company have not yet been disclosed.
“The main challenge is to complement our offer with external brands. This way we will bring more inspiration and energy, and we see great opportunities for growth and finding new customers, ”the message on the H&M website says.
It should be noted that over the past three years, the profit of the world's second largest fashion retailer (in terms of revenue, H&M is second only to Inditex) has been declining. And the main reason for the negative dynamics is the slowdown in sales in H&M retail stores, which generate the main revenue of the group. This week it became known that H&M sales in the third quarter of 2019 increased by 8%. The news was positive for H&M's share price, although investors remain concerned about the company's latest operating results, which keeps the retailer under pressure.
Among the major fashion retailers that have switched to a multi-brand store model, the British Next stands out in particular. Over the past ten years, the site of the company with a single brand has turned into a full-fledged aggregator for the sale of clothing, shoes and home goods from various suppliers. One way or another, it is too early to talk about a full-fledged transition of H&M to a new development model. The company will announce the possibility of expanding the project to introduce new brands and products into the assortment after the end of the experiment.