BoF Exclusive | H&M Launches New Brand: Arket – The Business of Fashion

STOCKHOLM, Sweden — Fast-fashion giant H&M is launching a new retail brand called Arket. The retailer will be a “modern-day market that will offer essential products for men, women, children and home,” according to the company.

It will sell Arket’s own products alongside a selection of products from non-H&M brands. Arket product will be priced slightly higher than that of the group’s core H&M brand, with men’s shirts, for example, starting at €39 (about $42) and stretching up to €115.

“We really believe it’s relevant to a modern customer to bring different brands together — under one roof, under one channel — and to make that choice for them and also make it more convenient,” Ulrika Bernhardtz, Arket’s creative director, told BoF.

“The brand DNA is timeless, crisp, quality and warmth,” Bernhardtz continued. “Timeless is style beyond trend. And crisp is the counterpart to that: to be always relevant, modern and fresh. Quality is not only the feel of garments; it’s also how they are produced. Warmth is about being genuine and personal.”

“Starting this project, a little bit over two years ago, we did quite extensive research and what we clearly saw was a broad customer base out there who are looking for classic, quality products in an environment that should be both simple and inspiring, but also putting our own fantastic design together with complementary brands,” added Lars Axelsson, Arket’s managing director. “Today the customer is very busy. They are looking for convenience, but also a place that they can really enjoy.”

Arket’s first retail store will open on London’s Regents Street in late summer or early autumn of this year. “We are starting in London as a global city to reach the world,” said Axelsson. The new brand will simultaneously start trading online in 18 European countries, with additional stores to follow in Brussels, Copenhagen and Munich. “We are looking into more cities obviously, but our main focus is Europe and we are starting there.”

Select Arket stores will include a café concept featuring ‘new Nordic’ cuisine. “We are adding on a café that will make the modern-day market a destination where you can both shop and enjoy healthy food,” explained Bernhardtz.

In addition to its phonetic link to “market,” the name Arket means “sheet of paper” in Swedish. “It both relates to our origin in the Nordic tradition of functional, long-lasting design and symbolises the blank sheet, the sense of optimism and possibility we felt creating this new brand,” added Bernhardtz.

The move is part of previously announced plans to “launch one or two new brands in 2017” and comes at a time of expansion for the world’s second largest clothing retailer, which is set to open 430 new stores this financial year, including outposts in new markets like Kazakhstan, Colombia, Iceland, Vietnam and Georgia. It is also part of a wider strategy for the group to expand its customer reach and improve its online services in what many see as a bid to reclaim its lost market share in the fashion industry.

Arket joins H&M’s existing brand portfolio, which includes & Other Stories, Cheap Monday, COS, Monki, and Weekday, as well as its flagship H&M brand.

“Ten years ago the first COS store opened, and since then we have added a number of new brands to the H&M group. Each with its own unique profile, our brands attract customers in various different segments,” said Karl-Johan Persson, chief executive and president of the H&M group, in a statement.

“Arket will offer a broad yet selected range of essentials for men, women and children, as well as a smaller, curated assortment for the home,” he continued. “The overall direction and focus is quality in simple, timeless and functional designs. There will be products in a broad price range, however in a slightly higher price segment than H&M with emphasis on materials, function and fit.”

This morning, the company announced its first quarter financial results. Group sales for the first quarter of its financial year rose by 7 percent to 5.4 billion Swedish crowns (about $6 billion), however pretax profits fell to 3.2 billion Swedish crowns from last year’s first quarter figure of 3.33 billion, due to lower sales growth as well as higher mark downs.

The retailer noted that conditions remained “very tough” in many key European markets and the in the US, as consumers expectations and shopping behaviour rapidly changes, which it said was reflected in its sales. Growth in local currency sales for the first quarter also fell short of its annual target set out in January of around 10-15 percent, at 4 percent.

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