H&M will launch a new collection in November in collaboration with luxury brand Versace. Co-branding is not new in the clothing industry, especially for H&M. The company has already collaborated with large luxury brands including Karl Lagerfeld, Viktor & Rolf, Jimmy Choo and Lanvin over the past few years. Why is co-branding becoming popular in the luxury and fashion industry? What are the risks and benefits for the brands involved?

Brands such as Zara or H&M belong to the category of ‘fast fashion’, offering the latest catwalk designs at lower prices. The target market is primarily young people who may not yet be able to afford the high-end luxury and fashion labels. H&M started the co-branding tradition with Karl Lagerfeld back in 2004, and their sales increased dramatically afterwards. Jean-Jacques Picart, Art Director of Lanvin and Senior Consultant for LVMH, believes that co-branding helped consumers to become more knowledgeable about and familiar with luxury brands as well. Although critics have expressed doubts that co-branding could damage a luxury brand’s image, H&M’s co-branding initiatives seem to tell a different story.

Luxury co-branding sometimes occurs between different industries as well. Famous examples include cell phones by Samung and Armani, laptops by Asus and Lamborghini and vodka by Absolute and Swarovski. Luxury brands are known for their exclusivity, but by merging their unique characteristics with a familiar product or brand that all consumers can enjoy creates a sense of excitement and adventure, which then builds positive brand perceptions and enhances sales revenue. Featuring cobranded luxury goods in a fast fashion store also acts as a gateway for mass market customers to enter the luxury goods arena.

As you can see, there are risks and benefits of co-branding for both the fast fashion and luxury brand. Labbrand has previously discussed co-branding and established that the collaboration must create value for both brands.
It appears that fast fashion and luxury goods co-branding have been highly successful for H &M and its partners in the past, that they have found a unique formula that contributes to both brands involved. We look forward to the H&M and Versace collection coming to China so we can have a firsthand look at co-branding in action.