COS in crisis? - Three reasons: a weak approach to digital, creative stagnation and lack of diversity

When it was founded in 2007, COS was supposed to be the champion of the H&M stable, already owning brands such as Weekday, Monki, & Other Stories and Arket. Its market position was intermediate: along the lines of Phoebe Philo's Céline and Isabel Marant, it offered elegant and minimal dresses, with a very Swedish aesthetic, equipped with architectural silhouettes and products with quality materials at affordable prices. Its positioning was a step higher than H&M (which was, both literally and figuratively, much more cheap) and one lower than the actual fashion brands, possessing a significantly lower price point. The idea of offering high basics to a more fashion savy audience worked well at the beginning: in the first ten years of life, COS's sales had reached one billion and made up 5% of the total revenue of the H&M group. But, as you can read in a long report by Business of Fashion, things were about to change.

Although the aesthetics of the brand have remained very consistent over the years, it has not been accompanied by a system of values properly transmitted through social media. COS's aesthetic has remained unchanged and essentially an end in itself - closed in the monotonous stereotype of essential Swedish design. The result was a fading brand identity. Not to mention that the main appeal of fast fashion is its rapid imitation of luxury trends, reproposing them at democratic prices. It is an unsustainable model but that works and satisfies the fickleness of the clientele – a model that COS has not followed over the years, stopping to be in step with the times and falling into repetitiveness, especially in an era when a defined and structured aesthetic has become increasingly important for the customer who wants to identify with the values and narrative of a brand.

Diversity and Instagram

In a fashion industry increasingly characterised by ethical considerations and topics such as inclusiveness and cultural diversity, COS's strategy to address the issue has seemed antiquated. The brand's employees, interviewed by Business of Fashion anonymously, spoke of a decidedly uninclusive corporate culture in which "casting of more diverse talent remains a battle." The lack of diversity would also be found in the design of the clothes, guilty according to some of not being thought for every body type. This is also the H&M Group's poor reputation for exploiting workers in developing countries – a bad reputation that began with the collapse of Savar's Rana Plaza, the worst fatal accident in the textile factory's history, which produced clothes for the group.

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We Must Do Better As a global brand we have a role to play in the Black Lives Matter movement. It is necessary to take tangible actions that lead to meaningful and lasting change, and we start by looking inwards. At COS we are committed to implementing a long-term plan to make our brand more inclusive and diverse for our customers, colleagues and community. To be transparent, we know from feedback received that we must do better. We will not tolerate any form of racism, discrimination or injustice in our business. We are taking the following steps as a starting point: We will listen and learn – a forum will be created to give all employees across the brand an opportunity to speak out. We will be accountable for change – an internal working group will be set up with immediate effect. This group will suggest and initiate further actions we can take both internally and externally, and we will ensure we uphold these commitments. We will continue to educate ourselves – implicit bias training received by our leadership team will be rolled out across the organisation. We will represent the diversity we value – a greater representation is needed at every level of our brand. We will review and clarify our recruitment, development and retention processes, as well as the partners and collaborators we work with. We are at the start of a new journey to becoming the business we want to be.

A post shared by COS (@cosstores) on Jun 10, 2020 at 6:21am PDT

These shortcomings are attributable, according to the Business of Fashion survey, to the monoculturality of its management, unsuitable to face an increasingly multicultural market. The same investigation reports that over the years there have been numerous complaints from employees about a closed, nepotistic corporate culture marked by ambiguous incidents of bullying and abuse of power promptly minimized or silenced by the brand.

What is COS doing to change?

At the end of last January, the role of Managing Director of the brand passed to Lea Rytz Goldman who succeeded Marie Honda, who remained in her position for the last eight years. Goldman's former role was the management of Arket, one of the youngest brands in the H&M Group portfolio as well as one of the most promising.

Goldman has already begun to make healthy changes for the company, such as an in-house workshop to redefine brand identity, enhancing e-commerce and establishing an open forum where employees can expose the problems they face in the workplace.

It is still too early to know whether the change of leadership will result in a real improvement in the performance of the brand – but COS is not a moribund company: its performance, although unsatisfactory compared to the past, remains strong; the brand has a its own identity and commercial potential as well as the financial and infrastructure support of one of the world's largest industrial conglomerates. First, Goldman intends to create a new corporate culture based on trust and geared towards positive change:

«As a new leader, when you want to create an open environment and an inclusive culture, that takes time. And I, together with the leadership, have to create trust for people to be able to speak up».