Haimamppac M Group will promote the new brand Arket store and open a coffee shop.

Consumers are constantly pursuing freshness, and COS, a brand owned by H&M Group with a history of ten years, has also begun to encounter bottlenecks.

Fashion Headline reported: Fast fashion is facing the dilemma of consumer freshness decline, and is launching new brands to save performance.

Swedish fast fashion group Hennes&Mauritz AB (STO: HM) today announced the launch of a brand new, named Arket, which will feature Nordic minimalist comfort, materials will be more sophisticated than H&M, so the price will also be higher than H &M.

At present, H&M Group owns COS,&Other Stories, Cheap Monday, Weekday and Monki in addition to its core brand H&M. After the establishment of Arket brand, the number of brands owned by the Group will reach 7.

It is reported that in addition to Arket's own products, the new brand store will also sell products of other brands of the group, but not H&M. Karl-Johan Persson, CEO of the group, pointed out in a statement that the group's definition of Arket is somewhat similar to that of a private label buyer's shop.

Karl-Johan Persson said that in order to better enhance the consumer shopping experience, Arket stores will not only sell men's and women's clothing, children's clothing and home products, but also have a Nordic-style coffee shop for consumers to entertain.

Arket will open its first store in London this autumn and will launch an online shopping platform, initially targeting 18 European markets. Karl-Johan Persson revealed that because Chinese consumers as a whole are not mature enough, the brand has no plans to open stores in the Chinese market in the short term.

Some analysts believe H&M chose to launch its new brand at a time when the global retail environment is so depressed that it is actually trying to stimulate further growth in the group's performance.

It is worth noting that H&M Group released its first quarter 2017 earnings data on the same day. In the three months ended February 28, the group's profit fell by more than 3% to 2.46 billion Swedish kronor or 274 million US dollars, but it was still higher than market expectations, while sales rose by about 8% to 46.985 billion Swedish kronor about 5.25 billion US dollars.

As a competitor of H&M Group, Uniqlo parent company Fast Retailing (06288.HK) also fully expanded its new brand GU and will open two stores in Hong Kong at the weekend. At present, GU has 11 stores in Taiwan and mainland China, and it is expected that the number of overseas stores will increase to 50 in three years, accounting for 10% of GU's overall sales.

However, he said Uniqlo would not compete directly with GU and expected the number of GU stores in Hong Kong to be on par with Uniqlo, which currently has 25 stores in Hong Kong.

In addition to launching new brands, H&M Group plans to accelerate expansion in emerging markets such as Vietnam and Iceland, while increasing investment in supply chain automation to improve production efficiency and shorten product refresh cycles as much as possible. Karl-Johan Persson said that the global retail industry is in a challenging period of change, and consumer demand is rapidly changing with the development of the digital age, which makes the Group's brands face great challenges, but also creates new market opportunities for the Group.

Some analysts believe that H&M, after its frenzied expansion, can be sure that it is currently in a performance bottleneck period, with gross profit margins falling to 55.2% from 60% a decade ago.

H&M Group shares tumbled 5.23 percent to a market capitalisation of about 331.7 billion Swedish kronor or about $36.9 billion as of the time of publication on Fashion Headline. com. (Wen/Zhou Huining)