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H&M’s Latest Big Move: Stella McCartney Tapped To Do Line for Retailer

Stella McCartney is collaborating with H&M for a women's collection expected to arrive in stores across Europe and North America for holiday.

PARIS — For the second time in her fashion career, Stella McCartney will be following in Karl Lagerfeld’s footsteps.

WWD has learned that McCartney, who succeeded Lagerfeld as Chloe’s designer in 1997, will attempt to fill his formidable shoes again by collaborating with Swedish fashion giant Hennes & Mauritz, which unleashed pandemonium last year with a Lagerfeld for H&M holiday collection that retailed from $19.90 to $149.

A 40-stockkeeping-unit Stella McCartney for H&M women’s collection is expected to arrive in H&M stores across Europe and North America in time for holiday selling. An official announcement is expected as early as today.

The tie-up is bound to be a publicity coup for both parties. McCartney’s rock ‘n’ roll heritage, celebrity connections and youth appeal are bound to bring new cachet and customers to the purveyor of affordable chic.

Meanwhile, H&M, which invested heavily in a major television and outdoor campaign to back Lagerfeld’s effort, should bolster brand awareness for McCartney, who has had limited advertising muscle, given the small size of her company. (Revenues for the fiscal year ended Jan. 31 were expected to total about 30 million euros, or $38.7 million at current exchange.)

Also, since she’s facing a 2007 deadline to reach breakeven set by Gucci Group, which owns 50 percent of her London-based house, the collaboration should bring much-needed synergies for her signature collection, three flagships and her hot cobranded activewear line with Adidas.

H&M is believed to have done consumer research to confirm the widespread appeal of the McCartney brand. Executives at H&M’s Stockholm headquarters are said to have long admired McCartney’s designs, which are cool, feminine and wearable.

The $7.3 billion juggernaut, which has helped transform the retail landscape with its design-for-all credo, has been on a roll recently with buzz-generating initiatives. Last month, it spent millions to stage a gigantic fashion extravaganza and concert in New York’s Central Park, sending 150 models down the runway to showcase its fall and winter trends.

And its pace of collaborations seems to be picking up. Last month, H&M said it had teamed up with Italian designer Elio Fiorucci to design a 100-item line of clothes and accessories for poolside that are slated for delivery next month in about 1,000 stores.

This story first appeared in the May 11, 2005 issue of WWD.  Subscribe Today.

Investment firms such as Morgan Stanley, which is bullish on H&M’s stock, have smiled on such initiatives. In a recent report, analyst Claire Kent said collaborations are helping H&M avoid the perception that it is just a clothing discounter by surprising its customer.

“We believe H&M is succeeding in making the brand ‘cool’ and moving itself away from the price battle among discounters and supermarkets,” she wrote. “We remain optimistic about H&M’s prospects in the U.S.”

To be sure, the Lagerfeld collaboration, soft-pedaled by a company with a low-key management style, generated enormous attention last year in the run-up to the Nov. 12 delivery of the designer’s tuxedo shirts, sequined jackets, wool overcoats and fluttering chiffon skirts.

Mass hysteria ensued in many European and American locations, with shipments expected to last weeks sold out within hours as shoppers stampeded into stores, picked shelves clean and even grabbed merchandise out of each other’s hands.

The Lagerfeld effect helped buoy H&M’s fourth-quarter profits, which vaulted 23.9 percent, while November sales catapulted 24 percent.

In the most recent quarter, profitability continued to accelerate for the Stockholm-based firm as net profits zoomed up 29.1 percent to $217.1 million on a sales gain of 7 percent.