In an exclusive interview, CEO Daniel Ervér outlined his strategy to turn the Swedish fast-fashion giant’s greatest weakness — its positioning above Shein but below Zara in the pricing hierarchy — into a strength. The initiative kicks off with a collection launching next month.
It has become a truism in fashion that the middle-market brand — situated somewhere between Shein at the low end and Hermes at the top — is going extinct. H&M Group’s chief executive, Daniel Ervér, begs to differ.
Six months after assuming the top role at the Swedish fast-fashion giant, where he has worked for nearly 20 years, the company is putting the finishing touches on a strategy intended to pull it out of a half-decade funk. At the heart of his plan is a concerted effort to convince shoppers that H&M’s clothing is worth paying for at any price, whether it’s a $15 knit top or a $200 suede skirt.
The retailer has refreshed its design criteria, Ervér said, granting its product team full creative control over its assortment, starting with a fall collection that includes leather pieces, long feminine dresses, and a faux fur long coat — “something for everyone to love,” the brand stated.
To better showcase those clothes, the retailer plans to complete renovations on 250 of its 4,000-some stores this year. A series of pop-ups in major cities and a website redesign are also in the works.
The ultimate goal is for customers to rediscover H&M as a compelling fashion brand, rather than trying to win the race to the bottom on price (though there will still be plenty of affordable basics).
“There will be pure low-price plays, there will be pure demand plays, and there will be the luxury or innovation play,” Ervér told BoF. “At the end of the day, it comes down to having a really relevant, competitive product.” Ervér is, in a sense, tackling the same existential threat H&M had a hand in creating for department stores and other traditional retailers 20-some years ago. Back then, H&M, alongside Zara and Forever 21, was the disruptor, effectively kicking off the hollowing out of fashion’s middle with ultra-affordable styles taken right off the runway.
In recent years, H&M has found itself on the other side of that dynamic as even cheaper and faster competitors such as Shein mutated the fast-fashion model. Around the same time, Zara positioned itself as the premium option in the category, using its elevated image to command higher prices.
H&M was caught between the two. Between 2019 and 2023, sales were virtually flat, at about $23 billion last year. In that same period, Inditex, which owns Zara, saw sales expand by 27 percent, to roughly $40 billion last year.
But under Ervér, H&M is doubling down on its orientation as being smack dab in the middle of the fast fashion landscape. Its fall collection, which hits stores on September 12, will feature a wider range of price points.
“There is a tremendous opportunity for growth,” he said. “And for profitability, which will allow us to invest in future transformation.”
Embracing a middle-of-the-market value proposition is a risky move, analysts say, but it holds potential upsides.
