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 about $42. Arket’s first retail store will open in London in late summer or early autumn of this year.
Total Retail's Take: In a struggling retail market, H&M, and fast-fashion as a category, are proving to be an exception. H&M is profiting from consumers increasing preference for rapid transition of merchandise from the designer's table to retail stores, with an affordable price point. As a result of this trend, H&M is trying to capitalize on the opportunity at hand with the launch of a new brand, albeit one that will be more expensive than the flagship brand. The concern is that H&M will overextend itself and be locked into long-term and expensive lease deals, which will prove challenging if a downturn in the fast-fashion category does occur.