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H&M to grow third-party brand strategy as online rivalry intensifies

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Reuters API


Jun 29, 2023

H&M plans to sell more third-party brands online and in stores, CEO Helena Helmersson said on Thursday, as one of the world’s top fashion retailers ramps up its effort to take on e-commerce rivals.


Shoppers can already buy sneakers from brands including Adidas and New Balance, and clothes brands like Swedish mountaineering label Klättermusen, via H&M’s Arket, Cos, and & Other Stories stores and websites.

Its marketplace strategy, launched last year, is aimed at challenging online rivals like Zalando, ASOS, and fast-fashion giant Shein as competition intensifies.

It contrasts with the approach of rival Zara, which has been better able to convince shoppers to pay more for clothes despite a cost of living crisis. Inditex-owned Zara features other brands only for exclusive collaborations, such as with South Korean label Ader Error and British shoemaker Clarks.

H&M now has 70 external brands on its platform in six markets, Helmersson said in an interview after the Swedish fashion giant reported a stronger-than-expected profit.

“This has been really well received by customers who also complement the H&M assortment with other brands,” Helmersson said. “Now we need to focus on making sure that we have the right kind of backbone, for example the right logistics, to really secure profitable growth.”

H&M’s success in driving a marketplace model will rest on its ability to differentiate itself, said Geoff Lowery, partner at Redburn.

“H&M has great customer reach globally and a lot of infrastructure to leverage, but the field of third-party apparel platforms is increasingly crowded from Zalando to Next, both of whom have already built scale,” he said.

H&M also said its Monki brand would launch on Hong Kong e-commerce site Zalora, indicating the company’s willingness to increase its presence on third-party platforms, again in contrast with Inditex’s Zara.

“Inditex’s thinking is focused on its own brands, own stores and own online,” said Lowery.

© Thomson Reuters 2023 All rights reserved.

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