Bloomberg News

H&M Plans Simultaneous Web Release for ‘& Other Stories’

January 09, 2013

Hennes & Mauritz AB (HMB), 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 today. 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,” Anne Critchlow, an analyst at Societe Generale SA in London, said in an e-mail. 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 SA (ITX) 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 percent, while H&M rose 1.5 percent.

“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 Isabel Cavill, a London-based analyst at Planet Retail. “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.”

Chelsea Boots

Prices for “& Other Stories” clothes will start where H&M store prices end, Chief Executive Officer 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 ($103.3) and heeled Chelsea boots for 150 euros.

“They’re looking for a different angle to the COS price range,” said 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 today.

H&M delayed the start of its online operations in the U.S. in September last year after adapting to the market took longer than expected, Persson said at the time.

Zara Online

“It’s beyond me why they haven’t launched online operations in the U.S. yet,” Cavill said. “In Europe, the service they offer online still doesn’t compare” to services offered by companies such as Web retailer Asos Plc, (ASC) she said.

Inditex introduced Chinese Internet sales for Zara in September last year and started online operations in the U.S. for Zara Home and Massimo Dutti in October. The Spanish retailer gets more than 35 percent of revenue from non-Zara brands, which also include Bershka, Pull & Bear and Stradivarius.

H&M fell 1.3 percent to 221.80 kronor in Stockholm. Inditex slipped 0.1 percent to 105.55 euros in Madrid.

“Multi-brand strategy is definitely going to be a key point for H&M if they want to close the gap with Inditex,” Ashma Kunde, an apparel analyst at Euromonitor in London, said in a phone interview. “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.”

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net


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