(Adds analyst comment, background)
By Veronica Ek and Simon Johnson
STOCKHOLM Jan 9 World number two fashion
retailer Hennes & Mauritz will launch a chain of
womens' clothing and accessory stores in the spring, trying to
catch up with rival Inditex's push into different parts
of the market.
While H&M has been rapidly expanding its core chain of
stores selling cheap-and-cheerful clothes for men and children
as well as women, it has lagged Inditex in diversifying into
higher price ranges and different fashion concepts to attract a
wider spread of customers.
H&M hopes its new "& Other Stories" stores, which will only
sell womens' clothes, will recoup some lost ground when they
open in Barcelona, Berlin, Copenhagen, London, Milan, Paris and
Stockholm, initially, and in a further three markets online.
Spain's Inditex, which owns fast-fashion flagship Zara,
already has eight separate brands to attract different types of
shoppers including the upmarket Massimo Dutti.
H&M has fewer - its Collection of Style (COS) which sells
more expensive clothes and a small number of Monki and Weekday
stores aimed at teenagers. The Swedish company has also made a
limited foray into interior furnishings with its Home concept.
The "& Other Stories" stores will sell clothes, shoes, bags
and accessories, but H&M has been coy about how they will be
different from the company's more than 2,700 other shops
worldwide which also stock such items.
Analysts say it will get harder for H&M to achieve its 10-15
percent yearly growth target for the core brand as its main
markets become saturated, and it makes sense in the long term to
diversify by adding more upmarket chains.
H&M is growing in Europe, North America and Asia and
considering opening stores in the southern hemisphere.
"Over the next 3-5 years, this (the new stores) will have
almost no effect at all," said Niklas Ekman, analyst at
"But if we look on a 10-year horizon, if H&M is going to
continue to grow, it is important they start new chains now."
Ekman said where Inditex had been successful with a
multi-brand strategy, H&M had had mixed results so far, though
its Collection of Style stores had done well.
This difference is reflected in the retailers' valuations,
with H&M trading at 20.2 times expected earnings for the coming
year versus Inditex at 24.4 times, according to Reuters Starmine
H&M spokeswoman Elke Kieft said the new stores would have a
wide range of styles and prices.
"It varies from, for example, flipflops for 7 euros to
leather boots for 225 euros ($290)," she said.
"A fabric bag could be 50 euros but we will have bags for
around 200 euros as well, and everything in between."
The stores will also sell cosmetics.
"Its our aim to be a one-stop styling destination," Kieft
Inditex also owns teen fashion stores Bershka, underwear
brand Oysho and casual youth label Pull & Bear. Outside the
clothing sector it has Zara Home and accessory chain Uterque.
($1 = 0.7654 euros)
(Reporting by Veronica Ek and Simon Johnson; Editing by Erica