H&M Is About To Inject Fresh Blood To Launch Fast Fashion Brand Arket

Fast fashion is facing the dilemma of consumer novelty, and new brands are being launched to save performance.

Sweden fast fashion group AB and STO: HM announced today that they will launch a brand new brand named Arket, which will play a leading role in the Scandinavian style of minimalism and comfort, and the material will be more exquisite than H&M, so the pricing will be higher than that of H&M.

At present, H&M group has COS, &Other Stories, Cheap Monday, Weekday and Monki besides core brand H&M. After the establishment of Arket brand, the group has 7 brands.

It is reported that in addition to providing Arket own products, the new brand store will also sell other brand products of the group, but it does not include H&M.

The group's chief executive, Karl-Johan Persson, said in a statement that the group's definition of Arket is somewhat similar to that of its own brand buyer shop.

Karl-Johan Persson said that in order to better enhance the consumer shopping experience, Arket shop will not only sell products such as men's clothing, children's clothing and household products, but also have a Nordic style cafe for consumers to enjoy.

Arket's first store will open in London this autumn and will set up an online shopping platform. The initial target will cover 18 European markets.

Karl-Johan Persson revealed that because the Chinese consumers are not mature enough, the brand has no plans to open stores in the Chinese market in the short term.

Some analysts believe that the H&M group chose to launch a new brand in the era of such a downturn in the global retail environment, in fact, in order to stimulate group performance and achieve further growth.

It is worth noting that the H&M group released the first quarter earnings data in 2017 on the same day. In the three months ended February 28th, group profits fell more than 3% to 2 billion 460 million kroner, or 274 million US dollars, but still higher than market expectations, and sales increased by about 8% to 46 billion 985 million Swedish Swedish $5 billion 250 million.

As a rival of H&M group, 06288.HK has also fully expanded its new brand GU, and will open two stores in Hongkong on the weekend. Yuzuki Ji, executive director and GU brand of Fast Retailing, said that at present, GU has 11 branches in Taiwan and the mainland. After three years, the overseas branches can be increased to 50, accounting for 10% of the total sales of GU.

However, he said that UNIQLO would not compete directly with GU, and hoped that the number of GU outlets in Hongkong could match that of UNIQLO. At present, UNIQLO has 25 branches in Hongkong.

In addition to launching new brands, H&M group also plans to accelerate expansion in emerging markets such as Vietnam and Iceland, while increasing investment in supply chain automation pformation to improve production efficiency and shorten product renewal cycle as much as possible.

Karl-Johan Persson said that the global retail industry is in a challenging period of change. Consumer demand is changing rapidly with the development of the digital age. This makes the brand of the group face great challenges, but it also creates new market opportunities for the group.

Some analysts believe that after the crazy expansion of H&M, it can be determined that it is now in the bottleneck of performance, and its gross profit margin has dropped to 55.2% compared with 60% of 10 years ago.

As of press release, H&M group shares fell 5.23%, about 331 billion 700 million Swedish kronor about $36 billion 900 million.