LOS ANGELES — Hennes & Mauritz plans to go head-to-head with retailers such as Gap and Macy’s West when it opens its first West Coast store in San Francisco next year.

H&M, the Swedish fast, cheap-chic fashion giant, has signed a 10-year lease for a 44,000-square-foot property at 150 Powell Street, near the Union Square shopping district. The scheduled opening is in fall 2005.

San Francisco is the corporate home to Gap and Macy’s West, both of which operate high-traffic stores near Union Square. In addition, Forever 21 is opening a three-story flagship in December at Market and Powell streets.

The U.S. is considered one of H&M’s growth markets. The retailer is on track to open about 10 stores in the country per year and is nearing the 1,000-store mark worldwide in 19 countries. There are 70 stores in the U.S. H&M on Wednesday reported a 6 percent rise in second-quarter earnings, lifted by its U.S. operations, which turned a profit for the first time.

“We hold up to the competition in quality and price and we want to be where they are,” said H&M spokeswoman Lisa Sandberg, noting the store will be “full concept” with offerings of men’s wear, women’s wear and children’s wear. “We do very well in these areas. People are attracted to the quality and price difference.”

H&M picked San Francisco over Los Angeles because suitable real estate became available there first, Sandberg said. H&M leasing executives have been spotted in L.A., said a real estate executive, who asked not to be identified. But there are no immediate plans to open a store in the city, Sandberg said. “We’re looking at different sites not just in California but everywhere in the U.S.,” she said.

Powell Street has the highest pedestrian traffic in San Francisco, said Vikki Johnson, who brokered the deal. H&M may build out the San Francisco market before L.A. “They have a history of saturating a market before moving on,” Johnson said.

Sandberg said H&M isn’t concerned that Gap’s D-Fifty concept might be used to target the H&M customer. “Basically, we wish them all the best,” she said. “We encourage competition. It must mean that we’re doing something right that people would want to emulate our business concept of fashion at the best quality.”H&M’s landlord, Union Property Capital, will soon begin remodeling the former multitenant retail structure into 34,000 square feet for selling and 10,000 square feet for storage.

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