After a dismal quarter for American clothes retailers, two international imports stand out: Sweden's H&M and Spain's Zara.
Zara parent Inditex, which trades on the Madrid Stock Exchange, reported first-quarter sales of €4.9 billion ($5.5 billion), up 12% year-over-year, with sales for the second quarter so far up by 15%. Stockholm-listed H&M's performance was more muted, with May sales up 9% compared to May 2015. Its second-quarter figures rose just 2%, to Skr46.8 billion ($5.6 billion), shy of the expected Skr48.13 billion.
The two companies are currently pursuing different business models. Zara is focused on revamping existing stores and expanding conservatively, while H&M plans to increase its store count 10% to 15% per year.
We sent two of our interns to investigate the shopping experience at H&M and Zara stores in New York.
Their storefronts hinted at the experience inside: H&M, advertising a sale, was busier, while Zara was neater and calmer.
Perhaps highlighting their international roots, both companies described merchandise in American, European and Mexican sizing.
H&M also offered a conversion guide.
Zara highlighted accessories more than H&M, with a particular focus on jewelry.
H&M differentiated itself with a (slightly untidy) display of swimwear.
H&M stacked its products high, while Zara favored a lower, more easily accessible layout.
A metal pole alleviated our intern's struggles to reach products at H&M.
Zara was a quieter shopping experience, while the lines were longer at H&M.
The Swedish rival is confident it can draw more crowds to new stores: H&M, unlike Zara, seems to be hiring.