China 'will be H&M's top market', says CEO Persson
Swedish fashion retailer sees mainland sales overtaking Germany as economy booms
The mainland will overtake Germany to become H&M's largest market as the fashion retailer opens stores there at a faster pace than anywhere else, Hennes & Mauritz chief executive Karl-Johan Persson said yesterday.
China's economy is "growing rapidly", he said, though he declined to give a time frame for when the country will be the Swedish company's top market.
Persson also said H&M would consider opening outlets in India, Brazil, Colombia, and Argentina, as European demand struggles to recover.
"The economic situation in Europe is tougher," said Persson, the grandson of H&M's founder, Erling Persson. It was "extremely tough" for Greece, Spain, Italy, and Portugal, while it was "a little bit tougher" than in the previous year in countries such as Germany, the Netherlands, and Switzerland, Persson said.
H&M, the world's second-biggest clothing retailer, makes most of its revenue from the euro zone, where governments are cutting spending and the jobless rate is at a record 11.8 per cent as the region's economy continues to suffer in the aftermath of the sovereign-debt crisis. While Germany remains its biggest single market, with 406 stores, the company opened 52 shops of last year's record 339 new stores in China.
H&M opened 22 stores in Germany in the year ended November 30 and closed 10. It is still expanding in southern Europe. Persson said H&M was not downsizing any market and would maintain its 10 to 15 per cent annual store expansion for many years, even as it develops business online.
The introduction of the "& Other Stories" brand could lead to lots of opportunities to open branches, he said. The brand will be based around four styles - industrial, minimalistic, glamorous and bohemian.
The Swedish retailer, which also owns the COS chain, is diversifying after falling behind the Spanish company Inditex in the race for the price-sensitive fashionista's euro. Inditex, the world's largest clothing retailer, has been pushing online business for brands including Zara. Inditex also owns the Massimo Dutti and Bershka brands.