Jeremy Hobson: The cheap chic clothing company H & M said today its profits fell last quarter — but not by much. And next month, the company will become the latest mid-range retailer to team up with a big name in fashion. H&M will be launching a collection
designed by Versace.
And as Sally Herships reports, the company would be well-advised to study the ups and downs of Target’s recent collaboration with Missoni.
Consumers want to buy their aspirations, which they tried to do when Target offered a discount line of Missoni products. Shoppers were angry about hard-to-get goods, but when high fashion meets mass market, the real risk is to the luxury brand being available at a discount for too long.
Paul Swinand is a retail analyst at Morningstar.
Paul Swinand: Once you’ve done that deal with pennies, it would be tough to go back upscale as a high-end brand in Nordstrom and Saks.
Versace and H&M’s solution? Fast fashion — move the line in and move it out.
In New York, I’m Sally Herships for Marketplace.
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