TheChek News Flow

Qatar will ‘stop’ EU gas sales if fined under due diligence law

Energy minister warns Doha ‘not bluffing’ over hefty penalties in corporate sustainability directive

Qatar has threatened to stop vital gas shipments to the EU if member states strictly enforce new legislation that will penalise companies which fail to meet set criteria on carbon emissions, human and labour rights.

Qatari energy minister Saad al-Kaabi told the Financial Times that if any EU state imposed non-compliance penalties on a scale referenced in the corporate due diligence directive Doha would stop exporting its liquefied natural gas to the bloc.

The law requires EU countries to introduce powers to impose fines for non-compliance with an upper limit of at least 5 per cent of the company’s annual global revenue.

“If the case is that I lose 5 per cent of my generated revenue by going to Europe, I will not go to Europe . . . I’m not bluffing,” Kaabi said. “Five per cent of generated revenue of QatarEnergy means 5 per cent of generated revenue of the Qatar state. This is the people’s money . . . so I cannot lose that kind of money — and nobody would accept losing that kind of money.”

The EU adopted the corporate due diligence rules in May this year. They are part of a broader set of reporting requirements aimed at aligning companies with the EU’s ambitious goal of reaching net zero emissions by 2050.

But the directive has prompted a widespread backlash from companies, both within and outside the EU, who have complained that the rules are too onerous and put them at a competitive disadvantage.

Cefic, the chemical industry body, said the due diligence rules would “create significant litigation risks” and should be thoroughly assessed “to identify and address areas for simplification and burden reduction so as to . . . limit the liability exposure.”

Non-EU companies will be liable for penalties under the directive if they earn more than €450mn in net turnover in the bloc.

Qatar is one of the world’s top LNG exporters and has become an increasingly important supplier of gas to Europe in the wake of the turmoil in energy markets triggered by Russia’s invasion of Ukraine.

As European states have sought to wean themselves off Russian gas, QatarEnergy has signed long term agreements to supply LNG to Germany, France, Italy, and the Netherlands.

Kaabi suggested that in its current form the legislation — which is due to come into effect from 2027 — would be unworkable for companies like state-owned QatarEnergy, which he is also chief executive of.

He said it would require the company to do due diligence on the labour practices of all the group’s suppliers, with a global supply chain that involves “100,000” companies.

“I probably need a thousand people with the size that I have and the billions we spend, or [would need to] shed millions on a service . . . to go and do audits on every supplier,” he added.

Kaabi said it would also be impossible for an energy producer like QatarEnergy to align with the EU’s net zero target as the directive stipulates because of the amount of hydrocarbons it produces.

The EU directive includes an obligation for large companies to adopt a transition plan for climate change mitigation aligned with the 2050 climate neutrality objective of the Paris Agreement, as well as intermediate targets under the European Climate Law.

Kaabi said the legislation would impact all Qatari exports to Europe, including fertilisers and petrochemicals, and could also affect the investment decisions of the Qatar Investment Authority, the sovereign wealth fund.

He said QatarEnergy would not break its LNG contracts, but it would look at legal avenues if it faced hefty penalties.

“I will not accept that we get penalised,” he said. “I will stop sending gas to Europe.”

However, Kaabi suggested that there could be room for compromise if the penalties targeted just income generated in Europe rather than total global revenue.

“If they said that the penalty is 5 per cent of your generated revenue from that contract that you sell to Europe, I say, ‘OK, I need to assess that. Does that make sense?’” he said. “But if you want to come to my total generated revenue, come on, it doesn’t make any sense.”

European Commission president Ursula von der Leyen promised last month to propose an “omnibus” legislation that would reduce reporting requirements from several of the bloc’s green finance laws, including the due diligence directive.

Intesa Sanpaolo chief calls on governments to stay out of banking deals

Comments from head of Italy’s largest bank Carlo Messina come as rival UniCredit battles opposition from Berlin and Rome

The chief executive of Italy’s largest lender, Intesa Sanpaolo, has called on governments to stop interfering in banking deals, leaving approvals up to regulators and the shareholders free to chose.

“It is the shareholders . . . those who are invested in companies . . . who determine their future,” Carlo Messina told the Financial Times. “Governments can’t pick based on their liking . . . they should only intervene in cases where financial stability is at stake.”

The comments come as Intesa’s main rival, UniCredit, is locked in twin battles with Rome and Berlin over potential takeovers of Milan-based Banco BPM and German lender Commerzbank.

This week UniCredit lifted its Commerzbank exposure to 28 per cent, just under the 30 per cent threshold that would force it to make a formal takeover bid. Germany’s outgoing government responded by inviting the Italian lender to sell its stake.

“It is clear that today we are in a phase where political consensus is built on defending ones national borders in certain sectors, but UniCredit already owns a large German bank [HVB],” said Messina.

Last month UniCredit also launched a €10bn takeover offer for its crosstown rival BPM, derailing the Italian government’s plans to merge BPM with Monte dei Paschi di Siena, which Rome is in the process of privatising. BPM rejected the offer as too low, and said the takeover would diminish competition in the Italian banking market.

“I believe that a third big player will emerge in Italy regardless, as the market will seek this,” said Messina.

“We view more consolidation and more competition in the Italian banking sector positively as this is key to ensuring robust investments in cyber security and technology, which contribute to the strength of the Italian economy.”

Under a decade of Messina’s leadership, Intesa’s market capitalisation has more than doubled to €69bn and the bank distributed a record €31bn.

In 2020 he also launched a hostile €4.2bn takeover of rival UBI Banca, which shareholders approved after five months of tense negotiations.

“Our acquisition of UBI Banca took place within the framework [I mentioned], respecting the positions of various authorities and receiving full approval from the market,” said Messina.

Over his latest three-year term at the helm — which expires in April, when he will seek a renewal of his contract — Messina has made technology upgrades a key pillar of his strategy.

However, recent glitches, including a breakdown of its banking app this month and illegal accesses to politicians’ private bank accounts by a rogue employee, have placed the lenders’ IT system in the spotlight.

Messina said the bank had since invested more than €30mn to set up a new internal controls system and segregate politicians’ accounts.

Years of strife ruined the energy sector, battered the currency and strangled growth. The West must ease financial controls to help the economy, experts say.

Although the collapse of President Bashar al-Assad’s government in Syria was shockingly quick, rebuilding the devastated economy he left behind will be painfully slow.

After nearly 14 years of brutal civil war and political repression, most of Syria’s oil and gas wells, roads, electricity grids, farmland and infrastructure are in ruins. Ninety percent of the population is living in poverty. The value of the Syrian pound has plummeted, and the central bank’s reserves of foreign currency — needed to buy essentials like food, fuel and spare parts — are nearly depleted.

Before the war, oil accounted for two-thirds of Syria’s exports and agriculture made up roughly a quarter of economic activity. More recently, Syria’s most profitable export was captagon, an illegal, addictive amphetamine controlled by a cartel of politically connected elites.

“The whole economic system in Syria is not functioning,” said Samir Aita, a Syrian economist and the president of the Circle of Arab Economists.

Ahmed al-Shara, the leader of the rebel coalition that has taken power in Syria, has a daunting task ahead to unify the rebel factions, reconstitute the government, re-establish the rule of law, provide security and manage essential services like the distribution of water and other scarce resources.

Even so, there is widespread agreement that the single most important step in rebuilding Syria’s economy can be taken only by the United States: Lift the punishing layers of sanctions that have effectively cut off Syria from international commerce and investment.

U.S. restrictions imposed in 2019 on financial flows were intended to punish the Assad regime. Now, they are cutting Syria off from money it desperately needs for reconstruction and economic development. Families and relief organizations cannot send assistance; refugees cannot transfer money from Western bank accounts to invest in a home or business; the International Monetary Fund and the World Bank cannot offer aid.

Lifting sanctions, even with temporary waivers, “is a priority,” Mr. Aita said.

Ending all financial restrictions would also mean removing the terrorist designation placed on Mr. al-Shara and his organization, Hayat Tahrir al-Sham, by the United States and the United Nations. Washington and its allies are sure to offer that prospect as a bargaining chip. But ultimately, Mr. al-Shara, who has a $10 million bounty on his head for his previous links to Al Qaeda, cannot effectively function as a head of state if he is labeled a terrorist.

This week, Geir Pedersen, the United Nations’ special envoy for Syria, said rebel leaders had issued “reassuring statements” about forming a government of “unity and inclusiveness.”

Washington has other economic cards to play. The center of oil production and the functioning wells that remain are in Syria’s northeast, territory controlled by a Kurdish-led militia backed by the United States.

Oil previously provided around half of the country’s revenues, said Joshua Landis, co-director of the Center for Middle East Studies at the University of Oklahoma. Those fields, he said, belong to the government in Damascus and should be returned to its control.

Resurrecting oil and gas production will not be easy. Before the war, Syria produced 383,000 barrels a day. Now, it produces less than 90,000, according to the World Bank. Facilities and pipelines, including those that deliver energy to Iraq, Jordan and Egypt, have been destroyed or damaged. The country has been importing more oil than it exports.

David Goldwyn, a senior energy official in the Obama administration, said Syria’s government would need to clearly establish that it owned and had the right sell those resources. Then it must be able to ensure security so that infrastructure can be repaired and operated.

The other challenge, he said, will be attracting foreign companies or operators who have the resources and know-how to rebuild.

Security is essential not only for oil and gas production, but also to draw back many of the eight million refugees who fled the fighting. Attracting those with education, skills and resources to return is crucial for Syria’s revival.

“Syrians with money are key,” said Dr. Landis at the University of Oklahoma, but many of them will not return if there is no electricity or rule of law.

Syria’s neighbors also have a keen interest in the return of refugees and in rebuilding. Turkey, which shares a border with Syria and hosts more than three million refugees, is best placed and has the most influence.

President Recep Tayyip Erdogan, who supported the rebels and funded a group allied with Mr. al-Shara, is looking to extend his influence there. He also has close ties to Turkey’s construction industry, and he is likely to push for reconstruction contracts and provide rebuilding assistance, said Henri Barkey, an international relations professor at Lehigh University.

The stocks in Turkish construction, cement and steel companies shot up after the Assad government fell.

At the moment, Syria’s economic future depends on the ability of the government in Damascus to consolidate control and establish its legitimacy — to the satisfaction of not only its own diverse population but also the United States and allies that have the final word on sanctions.

Rate cuts, stock surges, and Trump’s tariff threats are among the biggest forces shaping business and the economy.

Despite a tumultuous U.S. presidential campaign and intensifying global conflicts, the economy is poised to end 2024 in a stable position. Inflation has come down substantially and economic growth remains relatively robust, particularly for the United States. But the outlook for 2025 remains murky, as President-elect Donald Trump’s policy changes could affect the economy in unpredictable ways.

These nine charts showcase major trends shaping business and the economy — and what to watch in the new year.

Stock market highs (upon highs)

At the end of 2023, the S&P 500 was surging toward a new high. In January, it finally reached it, driven in part by the “Magnificent Seven” tech stocks: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.

As the bull market continued to run, stock market highs became commonplace.

The S&P 500 closed at record highs 57 times this year, with some especially large surges after the election, though the rally has slowed in recent weeks (more on that later).

A global cool-down in inflation, and with it, anticipation of an easing of monetary policy, have also helped fuel the blockbuster stock market.

For the past couple of years, monetary tightening was the name of the game in nearly all major economies, as central bankers raised policy rates to tame surging inflation. This summer and fall, many advanced economies began to cut rates for the first time since the pandemic.

In September, the Fed followed suit with a half-point rate reduction, an unusually large move and a clear signal that they were turning their attention from combating inflation to protecting the job market.

The Fed’s recent moves, however, have made clear that inflation risks are back. On Dec. 18, the Fed announced its third rate cut of the year, a quarter-point reduction as expected. But Fed policymakers dialed down expectations for cuts next year, suggesting that it would make just two rate cuts by the end of 2025.

The announcement, along with the range of uncertainty in the Fed’s forecasts (one Fed official expects no cuts at all next year, while another expects five), sent markets tumbling.

Bonds tell a less optimistic story

On the heels of the Fed news, the yield on a 10-year Treasury note jumped to its highest level since May.

Treasury yields also spiked in September and early November, even after the Fed first started cutting rates and stocks were soaring after Trump’s victory. The average rate on a 30-year mortgage, which tends to trend in the same direction, also went up. This may seem paradoxical, given the Fed’s rate cuts.

But investors in assets like 10-year Treasuries are thinking about what’s going to happen to growth and inflation over months or years. Higher yields could indicate that investors are anticipating higher inflation in the future for longer-term investments.

Some of the same factors that have fueled a Trump rally in stocks — enthusiasm for his policies of tax cuts, deregulation, stimulative government spending and tariffs — could be cause for concern among bond investors. Such investors may worry that Trump’s economic plans would increase the federal deficit, and with it, inflation.

During the U.S. presidential campaign season, both candidates expressed support for tariffs as an essential tool for protecting American manufacturers from Chinese and other global competitors.

A few weeks after winning the election, Trump announced that he would impose tariffs on all products coming into the United States from Canada, Mexico and China on his first day in office. During his first term, Trump imposed tariffs on some imports, particularly those coming from China, causing China’s share of imports to fall.

Sweeping tariffs could start a trade war if countries retaliated with tariffs of their own. Studies have shown that the cost of tariffs are often passed on to American consumers, leading to higher inflation.

Democrats and Republicans see the potential effects of Trump’s policies differently. Consumer sentiment among Republicans soared after Election Day, according to the University of Michigan’s consumer sentiment survey. For Democrats, it plummeted.

“Throughout this month’s interviews, Democrats voiced concerns that anticipated policy changes, particularly tariff hikes, would lead to a resurgence in inflation,” Joanne W. Hsu, who runs the University of Michigan Survey, said in a statement.

“Republicans disagreed; they expect the next president will usher in an immense slowdown in inflation,” she said.

Bitcoin is back

The crypto boom has highly correlated with Trump’s victory. On the campaign trail, Trump promised to make the United States the “crypto capital of the planet”; the day after he won, Bitcoin surged to a record high.

Then, earlier this month, the price of a single Bitcoin rose to $100,000 for the first time, an astonishing turnaround after its price dropped below $17,000 in 2022 after the collapse of the FTX crypto exchange.

But, like the stock market, Bitcoin is volatile, perhaps making it more of a speculative asset than a currency. After hitting an all-time high above $108,000 this week, its price has since dropped below $100,000. “It’s not a competitor for the dollar,” Jay Powell, the Fed chair, said this month at the DealBook Summit. “It’s really a competitor for gold.”

Nvidia’s astronomical growth

Nvidia, which this year briefly overtook Apple and Microsoft to become the world’s most valuable company, also stands to gain from the crypto boom. Its chips, used in video games and to train A.I. models, are also used for mining cryptocurrency.

Of the “Magnificent Seven” stocks, Nvidia has grown the most, with shares soaring nearly 800 percent since the start of 2023. In another indicator of the A.I. surge, Broadcom, another chipmaker, hit $1 trillion in market value earlier this month.

Nvidia’s shares have fallen in recent weeks after Chinese regulators opened an antitrust investigation into the chip maker.

In 2023, global M.&A. fell to a 10-year low, reflecting concerns about the global economy and geopolitical tensions, as well as uncertainty ahead of elections in several countries. This year, deal making has made a modest comeback.

In the United States, corporate deal makers are hopeful that a second Trump administration will be good for M.& A., especially as Trump’s pick for F.T.C. head, Andrew Ferguson, is expected to go easier on mergers than the agency’s current chief, Lina Khan.

But Ferguson, like Khan, has vowed to crack down on Big Tech. And interest rates could stay high, as uncertainty over Trump’s economic proposals persists.

Is the era of mega mergers over? Or will deal making come back with a vengeance? That might be the data point Wall Street is most eager to watch in the year ahead.

Will the M&A market pick up next year and, with it, the IPO pipeline?

And what about the tech job market, which again saw tens of thousands of workers in the U.S. alone lose their jobs in 2024?

Every year, we offer up some predictions for the startup world in the coming year. Sometimes we’re right — as in last year, when we correctly predicted that IPOs would not come roaring back in 2024. Sometimes we’re wrong — also last year, when we expected the AI frenzy to cool (lol).

So, along with a big grain of salt, here are the five top trends we’re watching in the new year.

There is a lot of optimism that the change of administration in the federal government will jump-start a slow M&A environment that many believe to be over-regulated.

M&A dealmaking involving VC-backed startups has slowed through the past few years — per Crunchbase data — and that has greatly affected VCs’ ability to give returns to their LPs and therefore raise new funds.

Many VCs hope a change in the Federal Trade Commission and U.S. Department of Justice will jump-start M&A activity after years of an overzealous regulatory environment quashed deals such as Amazon‘s proposed $1.4 billion acquisition of iRobot.

While big deals that got tied up in reviews make the headlines, other smaller under-the-radar deals failed to materialize because they have become more expensive and deemed not worth the money and hassle.

However, while change is inevitable at the regulatory agencies, there still is concern about how friendly the economy and new administration will be to both tech and M&A.

Increased tariffs — which President-elect Donald Trump has promised — could cause inflation rates to spike again, driving up interest rates. Also, while Trump has talked about less regulation he has also been critical of the power Big Tech holds. His nomination of Gail Slater — a frequent critic of Big Tech — to lead the Justice Department’s antitrust efforts has likely caused some pause in Silicon Valley.

Nevertheless, many are hopeful the M&A market will pick up — and with it the IPO pipeline — and liquidity from past investments will flow freely.

— Chris Metinko

After another slow year in 2024 for new tech listings, there is an expectation that the IPO markets will pick up in 2025. A year ago, the outlook was not bullish. What’s changed?

“I think there’s a lot of confidence in the market. Stock markets are trading at all-time highs,” said Ran Ben-Tzur of legal advisory firm Fenwick & West. And “there’s been a rotation back to focusing on growth, which obviously is great for tech.”

For now, two high-profile companies have filed: Sweden-based Klarna, a buy now, pay later provider that has confidentially filed with the Securities and Exchange Commission, and Cerebras Systems, an AI chip company that filed in September.

“We should see companies start to test the public markets in 2025 across sectors — fintech, cyber, AI, and SaaS, among others,” said Nina Achadjian, a partner at Index Ventures, via email.

“We’ll start to see momentum in the beginning of the year, and really accelerate, as the year goes on,” predicted Ben-Tzur, who saw early momentum in 2024 that then tailed off.

— Gené Teare

AI funding continues its torrid pace. More than half of last month’s $28 billion in global venture funding went to companies in the AI sector, with AI companies in everything from robotics to marketing to healthcare raking in funding.

Generative AI companies that build models, such as xAI and Anthropic, raise massive rounds seemingly at will, while many applications and agentic AI also seem to have little issue raising still-big rounds.

Just last month, San Francisco-based Writer, a creator of quick-start AI applications and agents for workflows in healthcare, retail and financial services, locked up a $200 million Series C that valued the enterprise-focused generative AI platform at $1.9 billion.

However, some are looking to the intersection of tech’s new big thing — AI — and Web3, its last big thing.

More specifically, what role could blockchain help in developing the AI economy, especially with so many startups creating AI agents? Some investors see significant potential between the two — especially as blockchain and Web3 worm their way back into people’s consciousness with the explosion in crypto prices.

It is possible for AI agents to work even faster on blockchain since security is already built in — not something that was added later, as it was on our current Web 2.0 platforms. The efficiency could make AI even after and more dynamic, while being more user friendly and cheaper for enterprises.

It’s very much early days for the blockchain and AI intersection, but certainly something to watch.

— Chris Metinko

During the peak of the unicorn boom in 2021, heavily funded startups were on a hiring spree. That enabled skilled workers to enjoy both high-paying jobs and some degree of career mobility in areas from programming to marketing to project management.

Of course, it didn’t last. Things turned south beginning in 2022, with scores of one-time highflyers cutting staff and those still employed increasingly opting to stay put. It’s a bit tough to gauge where we are in the cycle presently, but anecdotally and per media reporting, it appears tougher than usual to land a well-paid job at a mature tech company or funded startup.

For 2025, we predict that the job market will remain challenging in scores of once-hot areas for tech hiring. Mature startups and public companies, in particular, will be vigilant about ballooning costs, and avoid the kinds of moonshot efforts many once pursued.

One could argue that generative AI, where funding and hiring remain elevated, is an exception. However, the counter-argument is that these are the companies developing the technologies best-suited to replace human labor in other white-collar industries. So what’s good for them, might not be good for the rest of us careerwise.

— Joanna Glasner

The days when Silicon Valley was squeamish about developing military tech are clearly over.

As of mid-November, defense tech startups — defined as those in the military, national security and law enforcement sectors — had already raised nearly $3 billion in 85 rounds, per Crunchbase data. That represents a new record for venture investment in the sector, beating out the $2.6 billion raised by such startups in all of 2022.

A number of factors play into the tech industry’s new coziness with defense tech. Governments are scrambling to incorporate the most advanced AI technology into their weapons and defense systems as conflicts proliferate from Ukraine to the Middle East. U.S.-China tensions are likely to stay heated under the incoming Trump administration, especially when it comes to China’s ambitions with Taiwan.

There’s also a large amount of overlap between defense tech, aerospace and industrial tech — sectors that are likely to have strong support from the White House and allies like SpaceX CEO Elon Musk.

The Pentagon‘s 2025 budget request stands at $850 billion, with large allocations for unmanned systems and AI. Spurred on by the Ukraine-Russia conflict, Europe is also spending billions on defense tech research, including new AI-powered smart weapons, more advanced drones and better radar technology.

For 2025, we predict that venture investment in defense tech will continue to grow, buoyed by government spending and friendlier relations between Silicon Valley and D.C.

Faced with an identity crisis and stagnating sales, can the fashion brand regain an edge with Charli XCX’s help?

H&M HM.B 1.62%increase; green up pointing triangle has a unique problem for a mass retailer: It has gone too mainstream.

Or to paraphrase this summer’s chart-topper Charli XCX—and star H&M collaborator—the brand isn’t nearly brat enough.

For decades H&M enjoyed a sweet spot where it offered shoppers affordable but fashionable clothes, with collections from designers including Karl Lagerfeld and Stella McCartney alongside the brand’s own $20 hoodies and $40 dresses.

Now it is being undercut by lower-cost, faster-moving online brands such as Shein, while its collections haven’t always connected with younger consumers in recent years, analysts say.

In a growing and increasingly competitive fashion industry, H&M’s sales have stagnated, while rivals like Shein and the more upmarket Zara have thrived. H&M’s 2023 revenues of around $21 billion were barely higher than its 2017 total, whereas Zara-owner Inditex’s sales rose 42% over the same period. In the first nine months of this year, H&M’s sales fell 1% compared with a 7% increase for Inditex.

To regain its edge, H&M appointed Daniel Ervér as its new chief executive in January. Under the 43-year-old former intern, the Swedish company has lowered prices, modernized stores and spent more on marketing.

More specifically, H&M is making a play to regain cachet with young shoppers by tying the brand to Charli XCX and pop music more broadly, a campaign that included a series of live events in cities around the world this fall.

The priority is “regaining the brand heat, regaining that excitement,” Ervér said. The idea is to use music to forge a stronger identity that “resonates really well with the customer we want to reach,” he said.

Hundreds of Charli XCX’s fans recently descended on New York’s Times Square for a show starring the singer and hosted by H&M. But it isn’t clear how much of the stardust is rubbing off onto the brand.

“I like what she’s doing with the shop,” said Alyssa Migliarini, a 21-year-old college student who attended the gig. “But I wouldn’t shop there.”

H&M is also experiencing the perils of trying to piggyback on pop culture.

In a recent interview with Rolling Stone magazine, another of the summer’s breakout stars, Chappell Roan, clapped back at efforts by brands trying to attach themselves to her. “F— H&M,” she said, questioning the relevance of H&M and other brands to her “world.” The remark caused a brief flare-up between camps of the two singers, with Charli fans interpreting Roan’s attack on H&M as criticism of her collaboration with the brand.

A spokesperson for Charli XCX declined to comment on her partnership with H&M or on Roan’s remarks. A representative of Roan didn’t respond to a request for comment.

H&M says the music push is central to its plan to sharpen its identity.

“Music is more fashion than fashion,” said Jörgen Andersson, H&M’s creative director, observing that young people are usually more invested emotionally in their favorite musicians than in their preferred fashion brands.

H&M has sought to link music with its clothes by making Charli XCX the face of its autumn-winter collection. A leopard-print coat the singer wore for the campaign sold out within minutes, according to the company. It is also putting more emphasis on music in its stores, where songs being played are carefully chosen to reflect young consumer tastes, said Andersson.

The retailer has set up a public Spotify playlist, “The Sound of H&M,” which has been saved by the music platform’s users over 125,000 times. It is updated every week with the latest in-store tracks, which represent “the vibe and sound of the brand,” Andersson said.

H&M worked with a Swedish music agency called Ohlogy, which specializes in pairing brands with suitable artists, to hone the lineup for its shows and campaigns. With Charli XCX, H&M got lucky: It had an existing relationship with her from previous marketing efforts and was able to capitalize when the success of her “Brat” album catapulted the musician to superstardom over the summer.

The company has dipped into the music world before. In 2007, it flew Kylie Minogue to Shanghai for a concert marking the opening of its first Chinese store. Around the same time, it launched a collection designed by Madonna. But the one-offs had only a limited impact, encouraging the company to pursue a deeper program of events this time round, Andersson said.

H&M has put on a series of music events since September, including another Charli XCX show in London and a block party in New York’s SoHo hosted by model Amelia Gray. The audiences are typically a mix of VIPs, members of the brand’s loyalty program and the public. It plans a second series of shows next year to sustain its push into music.

The fashion brand is right to try to sharpen its identity because “it’s a bit hard to place what H&M does stand for,” said Jelena Sokolova, an analyst at Morningstar. Increasingly outflanked at the cheap end of the market, H&M needs to convince consumers it stands for something more, she said.

But ensuring that people who attend H&M’s shows or see clips online develop a more favorable view of the brand is a challenge.

Peter Goetz was lying in bed when he heard that Charli XCX would soon be performing at Times Square. He ran into fellow Pace University student Lucia Malone’s bedroom, told her they needed to go, and raced to the train. Soon they were pressed up to a metal barricade among a sea of New Yorkers under the orange glow of building-sized H&M ads.

“I literally have no feelings towards H&M, at all,” Goetz said. “I don’t hate. I don’t love.” For Malone, H&M’s involvement in the show was incidental to Charli XCX’s performance. “I’m probably wearing something H&M right now,” Malone said, without sounding entirely sure.

H&M’s Andersson said attendance and social-media engagement surrounding its events suggest they are having an impact.

However, young consumers are unforgiving and attuned to any marketing efforts seen as shallow or inauthentic, observers say.

“If you’re trying to be cool,” said AJ Lacouette, a managing partner at consulting firm Global Advisory, “you’re already failing.”