H&M enters the rental market; taking circularity to new level

 The high street fashion king unveiled its surprising new concept this week at its latest concept store, H&M Sergels Torg, named after the central shopping district in Stockholm, where it is located. Carefully edited with a slew of innovative ideas and business models, the store opens on Friday morning, November 29. Featuring a subtle variation on H&M’s typical no-frills stores, this new flagship has a loft-style feel with muted colors, modular wall-free interior design and even a second shopping play – a Beauty Bar. Like the store itself, the Beauty Bar will open at 7.30 a.m., allowing people to get a manicure or makeup on their way to work; and even pick up a cappuccino at an interior coffee truck.

Though the big news was H&M Rental Service, a selection of some 50 frocks, wedding dresses and exotic evening tops that can be rented for one week by H&M members for 350 Swedish kroner (€35) each, as part of a customer loyalty program. The sizes range from EU 34 to 48, for clothes whose original price point was between 599 kroner (€60) and 3,000 kroner (€300). “We started our circularity project three years ago. Now we want to explore rental. We believe in rental, for exclusive and occasional pieces. We chose these pieces precisely because these are quite expensive items that were often worn only once,” explained Pascal Brun, H&M’s French-born head of sustainability. 

 Members can book times for fittings with in-house personal stylists, allowing them to rent up to three pieces per week. All are made of sustainable materials, and come from H&M’s Conscious Exclusive collections from 2012 to 2019. In effect, Conscious Exclusive collections are recurring collections at the forefront of H&M’s substantial commitment to sustainability.  Initially, H&M found many of the garments in-house. A check of one gown revealed that it had an interior sticker indicating it had been used in a magazine photo shoot. “I’m very proud that these clothes still look so modern. Plus as they are Conscious Exclusive fashion they are made in materials like organic cotton or recycled waste from the ocean,” said Maria Östblom, head designer of H&M, noting that several pieces were bought from H&M’s own staffers. Looks include stylish couture-like silk halter neck columns with Chinoiserie nature prints; ecru lace flapper dresses cut with revealing slits and some bold blouses made of recycled lace fibers. The plan is to test out the concept for three months; after which it may roll out in scores of stores, eventually adding menswear and accessories. Executives were cautious about just how many doors. “Is it 100 or 200 or 500 stores? To be honest, right now it is very tough to say,” conceded Brun. Currently, H&M boasts 4,433 stores worldwide, in 71 countries with 145 more opening this year. Earning net profit of €1.2 billion on revenues of €20.3 billion.

 With rental properties – like Rent The Runway, Le Tote  and Armoire – enjoying growth, and online rental business predicted to enjoy rapid expansion, H&M has not stood still. It quietly paid some €25 million for a 72-percent stake in resale platform Sellpy, which collects unwanted clothes from customers, to effectively scale up its second-hand business. The two companies are not yet integrated, but, Brun explained, H&M is considering offering customers a Sellpy bag to evaluate the possibility for H&M customers to sell their second-hand garments online via an H&M platform. “It’s so easy to use Sellpy, when I do my annual cleanout of my wardrobe, I use it. You can earn money or leave it to a charity,” says Östblom. With fast fashion effectively on trial by global social media due to the ecological damage caused by many of its factories, fashion houses have been scrambling to respond to consumer concerns and complaints. Along with some 30 major fashion and luxury marques, H&M joined the Kering-led Fashion Pact announced in August, which is aimed at limiting the industry’s impact of the climate, biodiversity and the oceans.  Two key goals: zero net emissions of carbon by 2050 and 100% renewable energy use by 2030. Though closer examination suggests that this giant Swedish group is already at the forefront of corporate attempts to be more sustainable. H&M employs some 150 people in its sustainability department, almost certainly a larger number than any of its fashion rivals. It also leads the industry in fabric recycling. 

 The new 3,200 square-meter concept store includes a large pale gray cardboard recycling bin. H&M has installed them in the majority of its stores, offering vouchers for clothes at roughly the equivalent of 15% of the original garment’s price point. In 2019, it will collect 25,000 tons of used clothing – the equivalent of 150 million T-shirts. All these superfluous fashion and fabrics are then sent to its partner Berlin-based partner I:Collect, which recycles it in three ways. Either sold in second-hand stores; or shredded and put into car seats or sofas in the home furniture industry; or recycled into fiber that is turned into new items of clothing.  Sportingly, they even take garments from other brands. “Our customers really love it. Though it’s a bit of a logistic challenge in some markets,” said Brun, a graduate in textile engineering from Lyon, who believes that by now one out of ten customers use the recycling project. Across the upper floor, the new Beauty Bar done in partnership Dashl features a sweet pink finish, copper trim light fitting and lilac velour chairs; with beauticians offering everything from manicures to eyelash extensions. The store is on Drottninggatan, a central pedestrian shopping street crammed with other H&M brands: & Other Stories; Cos; Monki; Weekday; AFound, an outlet chain and Arket, a posher concept store situated somewhere between Muji and Colette. All told, the group has just under 5,000 stores worldwide. The new H&M store even includes a repair department, with signs announcing, “Repairing is caring,” and where two young seamstresses were busy prepping for the opening, displaying embroidery. Launched in France in 2018, H&M Take Care is available in the UK, Austria, the Netherlands and Scandinavia; each expressing national preferences.

 “We have different reactions in each country. In Sweden, they tend to like repairs, adding a patch or a zipper; in France they like to customize; while in Holland they want to completely re-make the whole look of the garment,” laughs Brun.  Customers can also pay at an express checkout, without any sales staff at self-scanning cash-desks. By using the H&M app, they receive an invoice electronically, but won’t be billed for the purchase for another 30 days. “It’s fully digital and paper free!” notes Daniel Claesson, head of business development. The sprawling boutique has only LED low-energy lighting and is made of composite, hard-wearing terrazzo floors and shelving. H&M essentially sources from renewable energy – with 96% of its power coming already coming from renewables. Meaning non-fossil burning sources – like wind, solar and hydro-electric power, albeit along with nuclear energy.

  Armed with the H&M app, shoppers can now scan Conscious Exclusive labels, which reveal the exact composition of each garment, its fabric supplier and the name and address of the plant that produced the item. Hard to think of many fashion brands who can claim that level of openness. Practically fashion glasnost. “We were the first company to disclose all our suppliers on our website. Now we do it by product. The only thing we still cannot control is cotton. We know most of our cotton farmers, but there is one element that mixes it all up – the spinning. The challenge remains in cotton where traceability is getting lost at the spinning level when the cotton is mixed up. There are some technologies available to trace the cotton such as DNA, and we are working with our partner such as Better Cotton Initiative and Organic Cotton Accelerator to find a solution. We have always believed in transparency,” stressed sustainability chief Brun, who spent 15 years in Asia with H&M, and was head of sustainability for production, when he had 150 people working for him. “That’s by far the largest sustainability organization of the retail industry,” he notes. “We all read the UN report today, so there is a global challenge we have to respond to. By 2030 we will be 8.5 billion people and practically need two planets. Back in 2014 we self-set ourselves the goal of being 100% climate positive. Another goal is that 100% of our raw materials are either recycled or sustainably sourced. That’s our circular agenda and we intend to connect the dots. So we are quite proud of our first rental. We know fast fashion today is not sustainable. But we believe that H&M is leading that change,” he added.        

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