H&M appeals to customers with its fast, fun, and inexpensive fashion.  H&M provides a continually changing assortment of reasonably priced items in order to keep shoppers coming back for more.  Increasing austerity measures in Europe are forcing some retailers, even low-priced apparel retailers, to consider lowering prices.  H&M has decided that rather than cut prices further, it is testing a higher-priced accessories chain called & Other Stories.  & Other Stories is based on the premise that shoppers will spring for affordable luxuries like scarves and fun lipstick shades.  Customers buy accessories because it is an immediate “way of buying a fashion trend without having to commit to a full fashion look.” & Other Stories will also offer a limited selection of more expensive clothing.  & Other Stories will focus primarily on wardrobe add-ons such as jewelry, lingerie, and shoes in four basic styles: minimalist, bohemian, industrial, and glamorous.

H&M is hoping this new line of retail stores will help it compete for a bigger share of the $111 billion market for shoes and accessories in Western Europe.   Many European retailers are focusing on the sales of accessories to compensate for lower sales of apparel.  Sales of bags and costume jewelry are expected to rise 13% through 2017.

& Other Stories launched in London in March and has exceeded expectations.  H&M might consider further expansion, but is taking it “step by step.”  H&M will be closely monitoring competitor Inditex (owner of Zara) and the growth of its Massimo Dutti chain which is aimed at attracting urban professionals.  H&M believes that & Other Stories will help it win customers who might otherwise shop at Zara.

Discussion Questions:

1.What type of growth strategy is H&M using with its new chain & Other Stories?

2. Would you rather shop at H&M or & Other Stories?  Explain your answer.

 

SOURCE: Julie Cruz, Business Week, April 25, 2013