Fashion Briefing: More mass brands are prioritizing experiential retail

For large fashion retailers, differentiation can be difficult. For its part, H&M has recently struggled more than competitors including Inditex and Shein. The brand has around 4,375 stores in 77 markets, with online sales in 60 markets. Parent company H&M Group’s net sales increased by 6% in its fiscal 2023 to $21.5 billion. On January 31, the company’s CEO Helena Helmersson stepped down after sales for December and January, which is typically the key holiday shopping period, fell by 4% compared with the prior year. 

H&M has mostly kept quiet since then, as its new CEO, Daniel Ervér, has been settling into the role. Ervér started at the brand 18 years ago as a summer trainee and has worked his way up to president and C-suite roles. In a February interview, he said the brand is focused on expanding the number of its fashion products and opening more stores.

This has no doubt, in part, been prompted by both the company’s recent results and the rise of ultra-fast fashion brands including Shein, especially through e-commerce. Although Shein does not disclose its revenues, it was last said to pull in over $30 billion in annual revenue. Other mass fashion retailers like Inditex have opted to focus on improving stores and elevating their assortments as a result of the competition.

In the U.S., that has meant shifting its strategy from straightforward retail to a concept store proposition. It opened its first iteration of this new-format store in SoHo, New York on February 6 — it’s seen great foot traffic, according to a brand spokesperson, who declined to elaborate. The 10,000-square-foot space at 591 Broadway focuses on womenswear. It has a “pre-loved” section of secondhand H&M fashions — a first for an H&M store in North America. In addition, it stocks vintage design pieces through an exclusive collaboration with designer James Veloria who curated the assortment. The store features a design inspired by local art galleries, as well as new service features including self-service order pick-up lockers and smart mirrors for product try-on. 

“There is much more competition in the U.S., especially given the proliferation of direct-to-consumer brands. So we need to be extra ‘right’ about everything, from product and price to customer experience and service,” said Linda Li, head of customer at H&M Americas,

Increasingly, the need to differentiate at retail goes beyond just offering customers a place to browse and buy IRL. Others that updated their stores since the onset of the pandemic include Coach, Banana Republic and J Crew.

“Especially after the pandemic, where consumers are shopping more online, there is a sense of urgency to truly rethink physical retail, hence our pushing into immersive experiences that feel hyper-physical and multi-sensory,” said Giovanni Zaccariello, Coach’s svp of global visual experience, in May. “We want to give our customers a memorable experience and create a strong emotional connection with them.” 

For many brands, the inclusion of resale in-store is catching on as part of a similar play. Other retailers that have recently added resale to their store offerings include Levi’s, Urban Outfitters and Weekday. The apparel resale market size was valued at $193.7 billion in 2023 and is expected to grow at a CAGR of more than 12% from 2023-2027, according to research company GlobalData.

“The resale market is on fire right now, so H&M can capitalize on the interest from consumers — it might drive a little foot traffic,” said Neil Saunders, retail analyst at data analytics company GlobalData. “That said, this isn’t the solution to H&M’s battle with competitors. Resale won’t protect the market share of new H&M lines from erosion. To do that, H&M needs to ensure its core ranges compete on style and value.”

Funding update

After securing an initial $1.7 million in funding from the tech incubator Lydian Group in 2022, fashion technology company Seamm has attracted another $2.5 million in fresh capital from the same group of investors, bringing its total funding to $4.2 million. Based in London, the technology company operates as a phygital fashion B2C marketplace, while also providing white-label SaaS solutions for brands. Seamm plans to use the funding to build out the brand roster on its DTC site and to expand its offerings to include digital product passport solutions. Seamm currently offers AR try-ons, product customization options and twin transfers of its digital styles into virtual worlds like Minecraft, Roblox and Decentraland.

Recent executive moves 

• Belgian designer Dries Van Noten is retiring from fashion and leaving his eponymous brand in June, after nearly four decades in fashion. A successor has yet to be named.
• Michael Kors is also reportedly looking for a replacement and retirement exit from his namesake brand.
• Ready-to-wear brand LaPointe has appointed industry veteran Reese Pozgay, previously at Revlon and Marc Jacobs International, as vp of marketing.
• Walter Chiapponi, creative director of Blumarine has announced his departure as creative director from Italian label Blumarine after just one season.
• Matches CEO Nick Beighton and CFO Dave Murray left the company last week following the administration announcement.
• Jean-Jacques Guevel, CEO of Balmain, left the brand this week.

In the headlines

Fast fashion brands like Shein could get taxed in France. H&M collaborated with RTW brand Rokh. Loro Piana is in hot water in the U.S. due to its use of vicuna wool. Gucci sales plunged 20% in the first quarter. Hermés is facing an anti-competition lawsuit in California. Phoebe Philo gives a rare interview after reports of her brand’s returns process issues.

Need a Glossy Recap?

Free People is getting into Substack. Mango is going deeper into AI tooling. Béis is growing its $200 million business. Investment is contracting in all areas apart from AI. And Filson’s head of strategy is on the Glossy fashion podcast this week.