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Is sustainability the real driver of H&M's new re-sale platform at Cos?

By Don-Alvin Adegeest

4 Sept 2020


It is in the interest of all businesses that produce products to sell as much of that product as possible. This is the bottom line. H&M Group’s announcement that its brand Cos will launch a re-sale platform called Resell - where customers can buy and sell pre-owned Cos items - is being positioned as a sustainable and renewable retail solution, when, in fact, it is a likely a business consideration at first.

Certainly the H&M Group is a sales-driven company, one that continues to grow exponentially each year, with net sales up 9 percent in 2019 and a global operating profit of 1.8 billion dollars.

Figures from GlobalData show the re-sale market will be valued at 51 billion dollars by 2023, up from 24 billion dollars in 2018. Interestingly, the re-sale market grew 25 times faster than the overall retail market, another reason why fashion companies are tapping into new potential revenue streams.

Cos said it will charge a 10 percent commission on each sale “to cover operational costs.” The company did not provide a revenue breakdown or financial forecast for its new venture.

While any move into circularity and becoming climate positive is laudable for a fashion business, H&M produces clothing at such scale that it has previously resorted to destroying the high volumes of goods it could not sell. The group shies away from overproduction conversations, instead finding solutions to continue to produce at the same rate but with less environmental impact. Some would argue this is akin to pharmaceutical companies who develop drugs to contain viruses instead of chanelling their resources into finding a cure.

Not all garments are created equal

An important consideration for the re-sale market is the value and quality low-cost garments will have in a second life. Selling last season’s end of sale leftovers may not excite a fashion savvy shopper, when the original sale price was already a bargain. Vintage, limited edition, timeless, seasonless and well-crafted goods are key drivers of the re-sale market.

Similarly, H&M’s wares across all its brands are not usually touted as long lasting investment pieces. The collections are trend-led and seasonal, which at lower cost make it affordable to frequently buy into shorter lifespan items, the lifeblood of the fast fashion industry. The success and demand in their second life remains to be seen.

Image via Cos Resell