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H&M Tests New Business Model

H&M is testing a marketplace model in two of its biggest European markets.

The fast fashion company is now selling third-party footwear, apparel and accessories brands like Lee, Wrangler, Fila, Buffalo, Crocs, Eastpak, Kangol, Mitchell and Ness, Superdry and LeSpecs on its German and Swedish e-commerce sites. Housed under a section called “H&M and Friends,” the selection accompanies H&M-owned brands including Cos, & Other Stories and Arket. The pilot will inform H&M’s strategy about moving a marketplace model into other international markets.

“We are now taking the next step in our journey and making room for more brands in our online channels, both from our sister brands but also other brands,” H&M told Sourcing Journal Thursday. Sweden launched in late February, while Germany opened at the beginning of March as the marketplace “will continue to add brands going forward,” the spokesperson added.

The microsite is housed under a section entitled "H&M and Friends."
The new venture indicates H&M’s strategy to grow the digital business while shedding stores. The company’s fourth-quarter earnings report showed 10 percent global digital sales growth, illustrating why the Swedish firm is investing in dedicated e-commerce sites in Belarus, Colombia, Kazakhstan, Peru and Ukraine. H&M

Meanwhile, H&M plans to close 240 global stores. While it will open another 120 new doors in strategic markets including Ecuador, Kosovo, North Macedonia, Costa Rica, Guatemala and Cambodia, the company will shrink its footprint by 120 locations and affect the 3,000 staff associated with those stores. But H&M is creating new jobs focused on digital and logistics expertise.

An H&M spokesperson said the company intends to expand the marketplace model into different international markets.

The company continues to invest in sustainable and circular business models by trialing rentals and promoting resale. In addition to adding a “Pre-loved” microsite to its own e-commerce site, H&M last summer increased its investment in Swedish re-commerce platform Sellpy, which counts the fast-fashion giant as a majority stakeholder. Similar to ThredUp, Sellpy lets consumers sell their pre-owned fashion items by sending them to the company in bags with pre-paid shipping labels. Sellpy lists the items for sale on its site, handling the back-end logistics when they are sold. As of June, Sellpy is active in 24 European markets with the help of H&M’s operational expertise. Earlier this year, Sellpy launched a mobile app available for Android and iOS.