While H&M is staying mum on the exact nature of the new brand, chief executive officer Karl-Johan Persson said we can expect something "like COS," that would "be independent and complement the other offerings from the group." [Ed. note: Like COS? The best store ever!? Please say it's so.] Could that mean a luxury line, designed by Behnaz Aram (previously of Whyred), is indeed in the works?
Maybe. “We have many different projects in progress," Karl-Johan Persson said.
"We have great faith in this new brand and we see considerable potential for further initiatives," he added, without providing more details. Hmm...
But in addition to the announcement of this new project, H&M had less exciting news to report: Margins had come under pressure in the fiscal first quarter, falling to 55.8 percent from 57.8 percent during the corresponding period last year, due to rising purchasing costs and increased markdowns.
Overall, though, the retailer's outlook is sunny: "Our collections have been well received which has resulted in increased market share in a very challenging fashion retail market, and we have strengthened our position even further," Persson said.
Perhaps a new luxury label could be just what the retailer needs to bolster profits.