LONDON, United Kingdom — H&M on London’s Oxford Street is on sale. A red haze of crimson £2, £3, £4 and £5 tickets has descended over the crop tops and t-shirts bearing slogans like “School Sucks” and “Don’t Kill My Vibe.” A song by Swedish dance duo Axwell λ Ingrosso plays loudly and a blinding neon white light tells customers to PARTY!
Across the road, the ground floor of Topshop smells — of hairspray, of cupcakes, of a garden in full bloom, from the mannequins in suede skirts and floral minidresses that are draped in fake flowers pumping out perfume.
Then, a few doors down on Regent Street, there’s Cos. Like H&M, Cos belongs to Stockholm-based H&M Group. In Cos stores (the Regent Street location is currently closed for refurbishment), clothes are neatly folded on plain wooden shelves, the music is quiet and there is ample space between the matte metal clothing rails. Inside this oasis, the clothing is embellishment-free and largely without patterns or prints. You won’t find a buckle or a zip on a Cos garment that doesn’t absolutely need to be there.
Since its launch in 2007, this clean, minimalist approach has made Cos a quiet rebel on a high street driven by fast-changing trends and flashy in-store experiences.
The formula is working. From 2009 to 2014, Cos grew from one percent to three percent of H&M Group’s total revenue, an increase of $132 million to $625 million in sales according to estimates by Euromonitor. In eight years, the label has built up 125 points of sale in 26 countries across Europe, Asia, the Middle East, the US and Australia. And now, Cos is pulling the trigger on its biggest expansion yet, with 27 new stores opening this year.
“They [H&M Group] really found the missing link and the gap in the market for a brand like Cos,” said Marie Honda, managing director of Cos, in an exclusive interview at the brand’s London headquarters. “The approach that we have, to have design quality for an affordable price was something that was missing.”
Contrary to H&M’s ‘fast-fashion’ model of quickly designing catwalk-inspired product and delivering new styles to stores each week, Cos — which stands for Collection of Style — creates two collections per year, each designed 18 months before it goes on sale.
“H&M is focused on volume — they need to produce higher quantities at a much faster rate,” said Bernadette Kissane, apparel analyst at Euromonitor. “H&M have to restock their stores every day, whereas Cos is more likely weekly.”
While product selection at other high street stores go wide and shallow, Cos goes narrow and deep. Alongside a vast array of blank architectural separates — drape-jersey t-shirts, skirts with asymmetric hems, clean-cut culottes — Cos’s website offers 22 versions of a white women’s shirt. “It’s those investment pieces, something that you can wear all over again and keep in your wardrobe all the time,” said Honda, who joined the brand in 2008.
Indeed, with its precise, smaller product selection and art-world allegiances — this year, Cos sponsored the summer “Park Nights” events at London’s Serpentine Pavilion — Cos has avoided H&M's mass-market image, courting more mature and high-end customers with a shopping experience that feels more expensive than its price tags. A Cos shirt dress costs between $99 and $225, compared to $34.95 for a similar item at H&M.
This upscale positioning makes Cos a unique weapon in H&M Group’s arsenal — one that many competitors do not have. Key players like Forever 21, Primark and Uniqlo are absent at the high end of the high street. Zara’s owner Inditex, the world’s largest fashion retailer and H&M Group’s biggest rival, has Massimo Dutti. With Cos and & Other Stories, a younger label priced between Cos and H&M that launched in 2012, H&M Group has two.
“H&M have a very well rounded portfolio at the moment,” said Kissane. “H&M is towards millennials, & Other Stories, although it is more expensive, is focussed more towards a younger consumer than Cos. Whereas Cos would be 35 plus, working, high disposable income.”
According to Honda, in its first five years Cos opened 10 to 12 stores a year. This cranked up to around 20 per year in 2012, when the brand launched in Hong Kong, China and the Middle East. This year, six of Cos’s 27 store openings are in North America, adding to the two in New York and Los Angeles that opened last year. As well as two in Toronto and Montréal in Canada, this year’s openings will include 4,000 sq. feet stores in New York, Houston and Costa Mesa, Orange County, and a 3,000 sq. feet store in Boston.
Cos’s initial presence in New York and Los Angeles has been well received, especially amongst fashion insiders, who knew the brand from trips to Europe. Known as “high-street Celine” in fashion circles, before it launched in the US editors were known to bring empty suitcases to European fashion weeks to fill up with Cos.
“We were so excited to be there for a long time,” said Honda, who explained that the availability of retail spaces is always a crucial decision-making factor — and the reason that Cos went into Asia before the US. Having opened its first locations in the US, Cos launched its American e-commerce business in 2014 and has since used online sales data to help inform where to next open physical stores.
“There’s the potential to grow even further within the cities that we’re already going into. New York and Los Angeles areas are definitely big potential to continue,” said Honda, but added that she sees Cos's customer as having “more of a mindset and an awareness” than a specific geographic location. “To have the ‘big city mindset’ you don’t have to live in a big city, to be curious and confident and really up to date about everything that’s happening around you.”
But store growth is not limited to the US. This year will mark Cos’s biggest global retail rollout yet, with nine stores already opened and 27 more to come. Of these total 36 stores, 13 will be in Europe, seven in Asia, six in North America and one in Australia. Canada, Czech Republic, Luxembourg and Hungary are all new markets for the brand.
Compared to H&M, Cos’s store expansion has been relatively slow. “They’re using the H&M main brand as an entry point into new markets,” commented Kissane. “That gives them [H&M Group] the chance to gain clearer insights into how that market works, the consumer base there. They are able to set up supply and distribution logistics — and then they go in with other brands, such as Cos.”
This strategy is akin to that of Inditex, which uses Zara as a litmus test in new markets before moving in with its other brands. H&M is in 59 countries, giving Cos a wide range of options of where to potentially move next.
But, according to Honda, Cos isn’t prioritising certain markets. “I don’t think we can single out one. But we’re continuing existing markets growth, and then also a lot of bigger markets like the US and some of the countries in Asia, where we see much faster growth,” she said. “For the next coming years, it will be quite equally spread out.”
But how far can Cos go?
“There is a limit to growth when you compare it to the H&M brand,” said Kissane. “I think the limit would be its price positioning and its demographic. H&M is quite versatile in the fact that it’s low-price and it’s trend led, fast moving, whereas Cos is quite specific in its target market.”
Honda explained that Cos’s growth is balanced. “We studied the balance within every market, so I don’t think we grow too quickly in each,” she said. “Just choosing locations carefully, give a lot of attention to each and every project to make every product feel unique… Design and quality and affordability. It will be our brand mission indefinitely.”
Editor's Note: This article was revised on 30 July 2015. A previous version of this article implied that Cos had stores only in Europe, Asia, the Middle East and the US. Cos is also present in Australia, where it has one store in Melbourne.