H&M Is Banking on Pop-Star Chic To Make Its Brand Cool Once More

H&M has a unique problem for a mass retailer: It has gone too mainstream.

- TREFOR MOSs AND OWEN TUCKER-SMITH

Or to paraphrase this summer's chart-topper-and star H&M collaborator-Charli XCX, the brand isn't nearly brat enough.

For decades, H&M enjoyed a sweet spot in which it offered shoppers affordable but fashionable clothes, with collections from designers including Karl Lagerfeld and Stella McCartney alongside the brand's own $20 hoodies and $40 dresses.

Now it is being undercut by lower-cost, faster-moving online brands such as Shein, while its collections haven't always connected with younger consumers in recent years, analysts say.

In a growing and increasingly competitive fashion industry, H&M's sales have stagnated, while rivals like Shein and the more upmarket Zara have thrived. H&M's 2023 revenues of around $21 billion were barely higher than its 2017 total, whereas Zara owner Inditex's sales rose 42% over the same period. In the first nine months of this year, H&M's sales fell 1%, compared with a 7% increase for Inditex.

To regain its edge, H&M appointed Daniel Ervér as its new chief executive in January. Under the 43-year-old former intern, the Swedish company has lowered prices, modernized stores and spent more on marketing.

More specifically, H&M is making a play to regain cachet with young shoppers by tying the brand to Charli XCX and pop music more broadly, a campaign that included a series of live events in cities around the world this fall.