Counting on the adage that sales of affordable luxuries like lipstick and scarves climb in tough times, Hennes & Mauritz is rolling out a new chain called & Other Stories that focuses on upscale accessories.
As it seeks to make up ground lost to rival Inditex and win a bigger share of the US$111 billion market for shoes and accessories in western Europe, H&M is opening seven outlets of the chain across the crisis-ravaged region this spring.
Better known for dresses and ballet flats cheap enough to be almost disposable, H&M promises curated style at & Other Stories. The stores feature a selection of more expensive clothing jockeying for space with wardrobe add-ons such as jewellery, lingerie and shoes in four basic styles ranging from "Industrial" to "Glamorous".
"H&M is getting a lot of pressure from low-price retailers on the one hand and from retailers like Inditex, which reacts faster to demand in the fashion world, on the other," said Soeren Loentoft Hansen, an analyst at Sydbank. With & Other Stories, H&M could "build some bridges to a higher price segment".
H&M needs a hit. Europe's second-largest clothing retailer has been lagging behind Inditex, owner of the Zara brand. The Spanish company's sales growth has outpaced H&M's for seven of the past eight quarters.
Inditex has set the industry standard for quickly getting product from design table to shop, defining the style of the moment while H&M shoppers are left waiting. That helped Inditex, which opened its own fashion and accessories chain called Uterque in 2008, overtake H&M by market value.
"& Other Stories is a totally different concept, a totally different brand with its own creative team and creative expression," said Pernilla Wohlfahrt, the head of new business at H&M.