PARIS — It’s taken four years, but Hennes & Mauritz AB finally has a flagship on the Avenue des Champs-Elysées.
The world’s third-largest fashion retailer today opened the doors of the store, designed by French architect Jean Nouvel, at number 88, marking a symbolic victory after protracted tussling with city authorities, who are trying to limit the presence of high-street retailers on the exclusive stretch.
Chief executive officer Karl-Johan Persson said it was important for H&M to be present on what has been dubbed “the world’s most beautiful avenue,” alongside brands ranging from Gap and Monoprix to Louis Vuitton and Cartier.
“The mix is fantastic, and I think it reflects the way people are dressing today,” he told WWD. “I think definitely this store adds something to the whole shopping experience on Champs-Elysées, so it’s good for us and good for tourists here, and Parisians.”
In the interview, Persson said negative external factors were likely to impact profitability in the months ahead, and hinted that change could be afoot on the designer collaboration front.
With 140 H&M stores and six units for its higher-priced COS concept, France is the second most important sales market for H&M, though far behind Germany.
Sales here totaled 6.57 billion Swedish kronor, or $896 million, in the nine months to Aug. 31, up from 6.19 billion kronor, or $779 million, in the same period a year earlier. Dollar amounts are calculated at average exchange rates for the period in question.
The retailer, which pioneered designer collaborations with its Karl Lagerfeld collection in 2004, will cement its Gallic ties when it launches the Lanvin for H&M line for women and men in 200 stores worldwide on Nov. 23.
Nouvel, who won the Pritzker Architecture Prize in 2008, has clad the three-story, 30,000-square-foot Champs-Elysées store in light sandstone to create a feeling of seamless transition from the pavement to the interior. Changing lights and moving screens complement the window displays.
It is only the second time H&M has recruited a prestigious architect to design a store, after working with Javier Mariscal in 2008 on its flagship in Portal de l’Angel in Barcelona.
Asked if H&M could move toward a more permanent relationship with a designer, similar to the one between Jil Sander and Japanese fashion giant Fast Retailing Co. Ltd, Persson replied, “Maybe, maybe. We don’t have anything to tell you today, but we’re looking at new things all the time.”
Creative thinking will be key in the coming months, as the retailer faces an increasingly challenging environment.
H&M last week reported that profits rose 22.6 percent in the third quarter, but warned that it would miss its target of 240 store openings worldwide in 2010 because the completion of some shopping malls, mainly in southern Europe, had been halted as a consequence of the weak economy. The company now expects to open 220 stores this year.
Persson noted that H&M took advantage of the downturn last year to snap up real estate left vacant by other retailers, upping its initial target of 225 store openings in 2009 to 250. Now that demand is heating up again, it has fewer alternatives when a deal is put on hold.
“Going forward, we still think that we can stick to our expansion goal of opening 10 to 15 percent [additional] new stores every year,” he said. However, he acknowledged the retail landscape is becoming more cutthroat. “Looking back 10 years and how it is today, the retail environment is definitely more competitive, and it will increase. There are more companies popping up all the time, and the best companies are improving,” Persson said.
Other external factors are also pressuring the bottom line. H&M said gross margin — a key measure of profitability — fell to 60.5 percent of sales in the third quarter from 61.6 percent in the year-ago period, and Persson warned it would come under further pressure.
“We are increasing like-for-like selling, so we’re happy with the development. It’s just that now, looking forward, there are external factors affecting us, and all other things being equal, it will affect the gross margin negatively,” he predicted.
“We have currency movements against us, we have the raw materials going against us, transport prices are up, the capacity surplus that we saw for quite some time at the suppliers — that is actually decreasing,” he explained.
Though the market will doubtless penalize any drop in profitability, Persson — who was named ceo last year — reiterated that the gross margin was not the company’s key target.
“Of course profitability is important, but we are a very customer-focused company,” he said. “For us, I don’t think it’s the right thing to steer the company after a certain gross margin.”
Instead, H&M is focusing on extending its reach in emerging markets. It will open its first store in Turkey in November and is looking to enter India, where Spanish rival Inditex’s Zara chain recently opened several stores.
“We are looking, but they have regulations there where you can’t own 100 percent of the company, and when we go into India, we want to have full control,” Persson said.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)