Fashion giant H&M set to open local stores

Jane Harper
March 25, 2013
Herald Sun

EUROPEAN fashion titan H&M has become the latest foreign group to shake up the Australian retail scene, confirming it will open its first local store early next year.

The Swedish chain, which trades in 48 countries, will open in Melbourne and Sydney initially, with a view to rolling out 10 stores nationwide.

Speculation has been rife over the past year that H&M – which specialises in mid-priced clothing – was ready to follow in the footsteps of fellow international chains Topshop, from the UK, and Spain’s Zara.

Both have been embraced by Australian shoppers since opening their first bricks-and-mortar stores in 2011.

H&M chief executive Karl-Johan Persson announced at the company’s first-quarter results that the group would push into Australia next year.
Property agents Colliers International has been helping H&M in the hunt for potential CBD sites.

“H&M were keen to see how Zara and Topshop went before locking themselves in,” Colliers director of research Nora Farren told BusinessDaily.
“But retail turnover in Australia has been quite solid and online sales show there is strong demand for this type of product.”

Department stores Myer and David Jones, which have struggled in the tough retail climate, both insisted this month that they welcomed international interlopers, as the new chains boosted foot traffic.

Commonwealth Bank analyst Andrew McLennan said it was inevitable H&M would steal market share from domestic retailers.

But he said the European group would face challenges in finding suitable sites, supplying stock for southern hemisphere seasons and accommodating Australia’s high labour costs.

“There’s no doubt the competitive landscape is increasing dramatically, but it’s not guaranteed that all these international brands will come in and automatically be a success.”