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Sapna Agarwal, Mint\n<\/i><\/p>\n
Sapna Agarwal, Mint
\n<\/i><\/p>\n
Mumbai, 20 June 2016<\/i><\/p>\n
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Swedish\nfashion retailer Hennes and Mauritz (H&M) on Monday said it will\ndouble the number of its stores in the country from six to 12 by\nyear-end. The Indian unit of Hennes & Mauritz AB, which entered\nIndia in October and currently operates stores in Delhi, Punjab and\nBengaluru, will expand to Mumbai, Pune and Chennai.
Two new\nstores in Mumbai will come up at Phoenix Mills in Lower Parel and\nPhoenix Market City in Kurla. Chennai will have its first H&M Store\nof over 34,500 sq.ft at Express Avenue Mall. Additionally, two\nlocations have been confirmed for stores in Pune at Phoenix Marketcity\n(33,000 sq.ft) and Westend Mall (23,000 sq.ft) and a third location for\nMumbai at Inorbit Mall, Malad, a suburb in Mumbai.
“H&M is\nhaving a great first year in India, the fantastic response from our\nconsumers, to adopt international trends in their wardrobes, and a\nstronger economy have encouraged us to explore new markets in metros\nand beyond. All our new locations will be full concept stores, offering\nthe latest in women’s, men’s and children’s fashion,” said Janne\nEinola, country manager, H&M, while sharing that the company plans\nto maintain the strategy of opening new stores in the market.
Globally,\nH&M had 3,970 stores as of 29 February and plans to open 425 more\nby November, The Wall Street Journal reported on 6 April. The company\nis the world’s second biggest clothing retailer by sales after Zara’s\nparent Inditex SA from Spain.
Inditex SA, the world’s largest\nclothing retailer which owns Zara, has been in India since 2010 in a\njoint venture—Inditex Trent Retail India Pvt. Ltd—with the Tata group’s\nhypermarket and department stores retail company Trent Ltd and has\nopened 16 stores in five years, according to its annual report for\nfiscal 2015.
Zara is one of the fastest growing apparel and\nlifestyle brands in India to have crossed $100 million in revenue\nwithin five years of operations. However, H&M looks like it could\ncross the $100 million mark in a much shorter time period. Despite its\nlate entry in the country, H&M is getting prime locations as mall\ndevelopers are making space for it, taking away the advantage of\nlocation for Zara. For instance, at Select City Walk in New Delhi,\nH&M has come in place of Pantaloons. Likewise, in Mumbai at Phoenix\nMills and Inorbit Mall, its new stores will replace stores of existing\nretailers.
“Sales per sq. ft of\nZara and H&M in India are roughly comparable adjusted for location\nand size. If H&M builds scale faster in a shorter time, it will\nmanage to cross $100 million in revenues even faster than Zara,” said\nDevangshu Dutta, chief executive officer, Third Eyesight, a retail\nconsultancy firm.<\/span>
India is the\nsecond-most attractive market for global retailers to expand after\nChina, according to The 2016 Global Retail Development Index by\nconsultancy AT Kearney. According to the firm, India has in the past\ncouple of years improved the ease of doing business. Clarity on foreign\ndirect investment (FDI) regulations too have helped.
To be sure,\nchallenges remain. India continues to be a complex market for foreign\nretailers, where understanding dynamics at the state level is important\nas the country’s 29 states have the power to opt in or out of FDI\nreforms. Also, infrastructure bottlenecks, including archaic labour\nlaws, complex regulations, high attrition rates, and limited\nhigh-quality retail space, remain important areas of concern for\nretailers, said the AT Kearney report, adding that still, the potential\nis vast as the country presents a $1 trillion retail market.
In\nthe past year, several foreign retailers have entered India. In\nfashion, A\ufffdropostale, The Gap, and The Children’s Place entered in\npartnership with Arvind Lifestyle Brands. Topshop and Topman entered\nvia e-commerce through Jabong.com, while H&M became the first\ninternational fashion retailer to enter alone after the government\napproved 100% FDI in single-brand retail.
Other sectors that saw\nmultiple entrants include sports (Sonae, under the Sport Zone banner),\nrestaurants (Wendy’s, Jamie’s Italian, Jamie’s Pizzeria, Barcelos and\nCarl’s Jr.) and convenience stores (UAE-based Fmart). Among existing\ninternational retailers, Marks & Spencer, Burger King, Dunkin’\nDonuts, Starbucks and Nando’s have initiated significant expansion\nprogrammes.<\/p>\n