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H&M, a Master of Cheap Fashion, Moves Upscale

Its new accessories chain takes a page from faster-growing rival Zara
$111 billion: Annual sales of shoes and accessories in Western Europe
$111 billion: Annual sales of shoes and accessories in Western Europe

Hennes & Mauritz’s H&M apparel chain made its name churning out fun, cheap fashions—$9.95 skinny jeans, $12.95 polka-dot ballet flats—that are almost disposable. The Stockholm-based retailer counts on a continually changing assortment of rock-bottom-priced goods to help keep shoppers coming back for more. Now growing austerity in Europe is pinching even sales of low-priced apparel. But rather than cutting prices further, H&M is testing a higher-priced accessories chain called & Other Stories—yes, it starts with an ampersand—in a bet that budget-conscious shoppers will still spring for affordable luxuries such as a fancy scarf or a trendy lipstick shade.

As it seeks to make up ground lost to rival Inditex, parent of the Zara chain and the world’s largest clothing retailer, and win a bigger share of the $111 billion market for shoes and accessories in Western Europe, H&M is opening seven outlets of the new chain this spring. Rather than rely on copies of hot styles, & Other Stories will feature fashions from H&M’s own ateliers in Paris and Stockholm. The first store, a two-story shop on London’s Regent Street a few doors down from an H&M, opened in March. It sells a £145 ($221) Clare Vivier tote, £10 brass rings, lipsticks promising the perfect pout, and Nike shoes. Accessories offer “a very immediate way of buying into a fashion trend without having to commit to a full fashion look,” says Jane Francis, who teaches at the London College of Fashion.