NEW YORK — It’s fine-tuning time for Hennes & Mauritz in the U.S.
On the agenda: smaller “concept” shops featuring narrower assortments that might just have men’s wear or kids, improved interiors to segment the merchandise better, and accelerating the pace of openings.
In addition, H&M wants more stores in Manhattan, where there are already seven.
The Stockholm-based fashion retailer, which has over 1,000 stores worldwide, has had an erratic four-year ride in the States since its flagship debut on Fifth Avenue and 51st Street in 2000. Profits have been elusive and the pace of store openings has slowed. The fact that the lease for today’s big opening — a 19,816-square-foot, two-level store in the Bloomberg Tower at 731 Lexington Avenue — was signed around the same time as the Fifth Avenue store underscores the challenges of entering new countries.
But for the opening on Lexington Avenue, H&M brought its top executives into town to celebrate, and spotlight the strategy shifts. The chain has 74 units in the U.S. and has been focused on opening stores in the Northeast and mid-Atlantic regions, Chicago and California.
“In Europe, we have opened some concept shops for men and children,” said Rolf Eriksen, chief executive officer of H&M. “I think it’s in the future for the U.S. We are testing some stores and in Germany, we have two special stores for men. We’ll see more of them, in Europe and the U.S., but I can’t tell you when.”
A handful of concept shops with more specialized assortments are in other countries, including Spain and Italy.
Start-up costs, he explained, have made it difficult for the U.S. operation to be consistently profitable. The U.S. operation did post a profit in the first quarter, but later lapsed back into the red.
“We had to spend a lot of money in the beginning to build a big infrastructure,” he said. “When we entered the U.S. market, we knew it would take time,” to turn profitable, he said. “For now, it’s not so important to be profitable. It’s more important to see if we are on the right track, and we have been satisfied for the last couple of years. At the moment, business is running very well in the U.S. Lexington Avenue is a great position, one of the best in New York. We signed the contract four years ago and have been looking forward to this opening.”
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