EXCLUSIVE: H&M Gets Inventive With Evolving Retail Presence

H&M is getting increasingly inventive, consumer-centric, and less “cookie-cutter” in its store rollout.

The Stockholm-based fashion specialty retailer is applying technologies to improve the customer experience, localizing assortments and testing some new concepts and services, while continuing to increase its store count.

Much of the investment is happening in New York City. “All 12 stores in Manhattan over the next few years will be either fully rebuilt, refreshed, relocated or simply brand new. So the customer in New York is going to get a really beautiful, elevated experience at H&M in New York,” said Michael Beaumont, head of expansion for H&M Americas, in an exclusive interview.

The investment push comes at a time when H&M, short for Hennes & Mauritz Group, has reported flattish sales and lower profits recently, partly due to some tough competition — in particular from Zara and its trendier brand image, and Chinese ultra-fast-fashion players like Shein.

In response, H&M has been working to improve its fashion, upgrade its retail environments, and broaden its price points as it looks to become a more efficient and profitable company.

Earlier this year, Daniel Ervér, chief executive officer of H&M Group, described 2024 as a year when the company would be “laying the foundation for future growth, increasing the pace of improvements in the customer offering, and deprioritizing things that don’t strengthen our brands or contribute to our sales and profitability.”

Pop-ups are part of the program.

A 1,000-square-foot boutique will operate in Manhattan’s NoLIta neighborhood, from Oct. 24 to Dec. 29, at 374 Broome Street. “It’s very intimate so we can spend more time with customers and talk them through the H&M experience,” said Beaumont. “As you walk in, you’re going to be hit by the color red. We will have these beautiful red panels on the floor-to-ceiling windows that allow this amazing red light to shine through.” There will also be a “red mixed-media library” with books, tapes and records. “We’re really celebrating our brand identity and the red in our logo.”

The NoLIta boutique will also carry a vintage archival collection as well as “signature” styles from H&M’s latest collections that Beaumont said were selected especially for the NoLIta crowd. “This is a very trend-setting, young, fashion-forward crowd, so with a very small footprint to play with, there’ll be very specific garments taken from our latest collection available in NoLIta,” said Beaumont. There will also be an aroma specialist offering shoppers personalized essential oils.

“They’re inspired by New York, but you can customize it so you get a very bespoke essential oil. This will be a first for us,” Beaumont said. Customers should notice how the pop-up has been designed with high-quality finishes including curved chrome checkout stations.

NoLIta is only the second pop-up H&M has attempted in the U.S., though there’s been a handful in Europe, including London, Paris and Milan. “One reason why we have pop-ups is to test new things,” Beaumont said, adding that in the former Williamsburg, Brooklyn, pop-up, there was a pre-loved vintage selection of clothing. Based on the customer reaction, it was duplicated a few months later at the SoHo store, a 9,800-square-foot women’s-only setting, which is weighted toward the Swedish brand’s trendier and more tailored styles, and rigged with tech and service innovations.

“We have this great energy and excitement happening in New York that is going to spread to other major cities,” said Beaumont, referring to the upcoming openings this year, in Brickell City Centre in Miami on Oct. 17; in the Queens Center in Elmhurst, N.Y. on Oct. 24; in the Royalmount center in Montreal, on Nov. 7 and in Westfield Culver City in Los Angeles on Nov. 14. H&M is also opening stores at 679 North Michigan Avenue in Chicago, and in Quito, Ecuador. By the end of this year, H&M will have 494 stores in the U.S.

Asked why the NoLIta location, just a half-mile from the SoHo store, was picked for a pop-up, Beaumont said: “It came about through talking to our customers. Essentially, they decided we should have a pop-up in NoLIta. We found out what they did during the day, where they went at night, we spoke to them at events, and we kept hearing about NoLIta’s cafes, restaurants, bars, spas, hairdressers. So it became obvious that we should try something.”

After members of the H&M team spent some time in NoLIta, they were struck by the building where the pop-up is being housed. “It’s a very old, proud building on a corner, with lovely red bricks, great details like the mosaic tiles on the steps as you enter,” Beaumont said. “It kind of reminded us of H&M. We’re a heritage brand. We’ve been around since 1947, and we’re coming up to 25 years in New York City. So there’s quite a lot of synergy between this building and our brand. We’re trying to be authentic to the neighborhood.” H&M has partnered with Los Angeles-based design studio Perron-Roettinger to design the NoLIta concept.

“We’ve invested a lot over the last few few months in the brand, in experiences for customers. So there’s a real energy about H&M,” Beaumont said. The NoLIta pop-up “is quite unique to us,” he said. “Some of these flagships we’re opening in this fall, they will also have specific or unique features in their design,” involving customized experiences.

According to Beaumont, H&M has a program of upgrades for stores with interiors being designed with the specific local market in mind. “Whether that’s the space we take or the architectural details [added] within, we try to customize each of our flagship locations to make every one slightly unique.”

About 10 percent of the U.S. fleet is being or was upgraded to varying degrees in 2024, and another 10 percent is slated for upgrade next year. “Customers are going to feel an upgrade because of some technology improvements we’re rolling out across the portfolio. They might not necessarily see a new store, but they will definitely feel an upgrade in terms of the customer experience, the interaction with our sales associates, the stock availability [flagged] by technology we’re investing in,” including RFID readers giving H&M associates “complete stock transparency,” said Beaumont. “If a customer comes in and asks for a particular item, we can show them very quickly where it is.” It could be in another store, or online. Also, associates are being given handheld devices giving customers another way to check out faster and more conveniently,” Beaumont noted.

“Customers are coming to stores for that human interaction. So we believe in empowering our sales associates with this technology so they can spend less time searching for garments for a customer and more time talking to them about styles or offering buying suggestions,” Beaumont said.

“We have a lot of confidence in this market,” Beaumont said, adding that H&M’s efforts at change in the New York market can impact the brand in other key cities. New York is currently H&M’s biggest market in the U.S.

“I’ve worked for H&M for over 13 years in five different countries, and we’ve really reached a new level of energy, excitement and passion,” Beaumont said. “We’re elevating store experience. We’re elevating the online experience and elevating the collection. We have an expansion strategy to rebuild our flagships and open new ones in the very best locations. We are using data and technology all the time to influence our decision-making. We are seeing that we can be a lot more precise in, for example, store locations, or with the assortment inside a store.”