By  on November 22, 2005

SAN FRANCISCO — Swedish retailer H&M opened its first West Coast store here on Saturday in a prime downtown location, with the launch getting an extra lift from shoppers clamoring for Stella McCartney's fashions. A second unit opened nearby.

Executives with the fast-fashion chain of 1,100 stores in 22 countries planned their California debut for three years, said H&M managing director Rolf Eriksen, standing near a table of $29.99 cowl-neck sweaters.

"The location here was great," he said. "That's important for the first time you're in a new area. It's like a new country, moving to California. Of course we'll go south [to Los Angeles], also."

San Francisco Mayor Gavin Newsom said in announcing H&M's arrival last June that he expected the company's sales in the city to be $50 million a year. Eriksen declined to forecast sales, but said they should rival those at H&M's 34th Street store in Manhattan, which opened in 2000. The company has 70 U.S. stores.

The San Francisco flagship at 150 Powell Street in the Union Square retail district has 35,000 square feet of selling space on the first and second floors, and 8,000 square feet in the basement for operations. The 1908 building, which formerly housed several shops, is around the corner from Macy's, Sak's Fifth Avenue and Neiman Marcus, and down the street from Urban Outfitters, Forever 21, French Connection and Gap's flagship.

A second, smaller H&M location —12,000 square feet — also opened on Saturday six blocks away at 150 Post Street, selling lingerie and basic apparel. Max Mara, Guess, The North Face, Coach, Talbots and the Banana Republic flagship are nearby, among other national and international retailers.

Eriksen didn't offer a timetable for H&M's westward expansion, although he said more stores will open in the Bay Area. One location for this spring has been announced, in Concord's Sun Valley Mall.

The San Francisco stores feature a new look, although the spare, modern H&M interiors are still present. Sanna Lindberg, manager for H&M in the U.S., pointed to a yellow accent wall, a mural and dark plastic mannequins as among some of the new flourishes being first used in the Powell Street store.Lindberg noted the accessories department has been tripled to 1,000 square feet and the two-store opening in the same city was a first in the U.S. for H&M, although its been done in Europe. All merchandise is being trucked from New York.

At the openings on Saturday, Stella McCartney merchandise was stocked at both stores and by the 10 a.m. opening, lines of customers extended for blocks. "I like her designs and I want to see what she can do for $79," said Mukya Porter, who arrived at 3 a.m. to get a spot near the front of the Powell Street store.

Lindberg declined to elaborate on sales or numbers of outfits sold.

H&M's debut in San Francisco comes as apparel sales here — and the city's economy — has been generally improving after a double bruising in 2001 from the dot-com bust and the terrorist attacks. In 2004, apparel sales posted a 16.6 percent increase against 2002, for a total of $859.66 billion, according to city statistics.

"I think it's a really optimistic time for retailing," said Dennis Conaghan, executive director of the San Francisco Center for Economic Development.

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