Brand Collaboration | Fashion Updates | Retail

H&M Adapts Strategy to Woo Trendy Shoppers Amid Shein Competition

Published: January 3, 2024
Author: Fashion Value Chain

Fashion retailer H&M is reportedly adjusting its game plan to attract more style-conscious shoppers and set itself apart from fast-fashion giant Shein. With Shein’s rapid growth in the market, H&M aims to regain profit margins and secure its position by focusing on more upscale customers, as per a Reuters report.

Shein has become the world’s largest fast-fashion retailer, grabbing an estimated 18% market share with its budget-friendly offerings, including $8 dresses, $5 T-shirts, and $2 jewelry. H&M, in response to Shein’s ascent, is repositioning itself to target a more affluent audience, emphasizing its commitment to fashion, quality, and sustainability.

Despite H&M’s denial of a shift in strategy, analysts suggest the retailer is making moves to distinguish itself from Shein’s budget-focused approach. Collaborations with renowned designers, like the recent partnership with Paco Rabanne during Paris Fashion Week, showcase H&M’s efforts to appeal to aspirational shoppers.

While Shein poses a threat to H&M, Zara, owned by Inditex, appears less directly impacted due to its distinct customer base of white-collar workers. Analysts predict Zara will continue to outperform the broader apparel industry, although Shein’s growth may surpass Zara’s in the coming years.

H&M faced a 4% decline in sales in its fourth quarter, losing ground to Zara. However, measures like price increases and reduced discounting have boosted its operating margin to 5.9% for the first nine months of the financial year. H&M’s premium brand, Cos, has shown demand for higher-priced products, indicating potential success in attracting aspirational shoppers.

Investors are optimistic about H&M’s goal to achieve a 10% operating margin by 2024. The retailer’s shares have seen a significant increase, though Inditex maintains a higher valuation. In a bid to compete with Zara and Shein, H&M is actively working to introduce new collections faster to the market.

In a separate move, H&M announced in September its plan to sell secondhand clothing from its flagship London store, promoting both value and engagement in a “circular fashion industry.”

Related Posts

Gurgaon Based Real Estate Development Organisation Whiteland Corporation Appoints Mr. Raj Kumar as Chief Operating Officer

Fireside Ventures backed 10club starts its offline journey by partnering with Wakefit

AppX is Acquiring EdTech and Creator Business of AppSquadz to Empower More Creators

Masaba Gupta to marry fashion & reality TV in her latest stint.