NEW YORK — Call it the battle of the biggest.

This story first appeared in the August 28, 2013 issue of WWD. Subscribe Today.

Across from Macy’s, the World’s Largest Store, H&M is building the Largest Store in Its Global Fleet.

H&M’s 63,000-square-foot space will be a fraction of the Macy’s Herald Square flagship’s 1.2 million square feet. But H&M’s four-level flagship at Herald Center, bowing in fall 2014, will be unlike any other unit in the chain, offering the singular combination of women’s, men’s, sport, maternity, plus sizes, accessories, cosmetics, children’s — from newborns to kids age 14 — and home.

The Swedish retailer operates two existing stores within blocks of the new flagship, one on 34th Street and Broadway, and the other on 34th Street and Seventh Avenue. At the moment, the company has no plans of closing either store or converting them to other concepts.

H&M has used the strategy before — clustering stores within blocks of one another — in San Francisco and SoHo, here. “There’s a lot of traffic in that area,” said Daniel Kulle, president of H&M North America. “As we’ve done before, we’re keeping all the stores open in close proximity to each other.”

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Macy’s, which developed so-called fast-fashion brand Impulse, has been trying to make inroads with 24- to 30-year-old customers, one of H&M’s key demographics. Macy’s recruited Karl Lagerfeld, among others, to collaborate on collections for Impulse. Lagerfeld in 2004 ignited the masstige movement when he partnered with H&M on a onetime collection that sold out in a flash. That led to annual designer hookups at H&M and copycat launches by other players.

H&M has been expanding aggressively in the U.S. In March, the retailer said it was opening 10 stores in cities such as Chicago, Washington, New Orleans and Honolulu.

The Herald Center flagship will take the title of biggest store in the world from a previously revealed 57,000-square-foot unit opening on Fifth Avenue and 48th Street. H&M is also planning to open a 42,500-square-foot store at 4 Times Square at the end of 2013. The retailer said the three new Manhattan stores will together hire 900 employees.

Kulle explained the difference between the Herald Center and Times Square neighborhoods. “The Herald Square location is a very strong shopping district with both national and international retailers,” he said. “The Times Square location is a very strong international tourist destination with global visibility.

“We are proud to continue our unprecedented expansion in New York City with this groundbreaking Herald Square location,” said Kulle. “Locking in our 14th store in Manhattan shows our continued commitment to growth in the New York City market. Thirty-Fourth Street has proven to be one of the most successful retail corridors for the brand after having operated two stores there for over 10 years. With close to 300 stores across the country as well our new Shop Online, the H&M anchor store at this historic intersection will be one of our greatest accomplishments to date.”

A source said that even though H&M may not have been shopping for a new location in Herald Square, the company, which is opportunistic in its leasing, pounced in characteristic fashion. “They found this incredible space,” said the source. “It’s a very impressive space, and they wanted to grab the opportunity.”

H&M’s rendering of the new flagship shows that a brighter day is dawning for Herald Center, the 10-story, 250,000-square-foot retail and office property located at the southwest corner of 34th Street and Broadway. The building, clad in depressing black glass, was a jumble of odd layouts inside for retailers such as Daffy’s, Toys ‘R’ Us, Payless and several low-end stores. H&M won’t be the only retailer in the building. A Bank of America unit will open there, and there could be a few smaller stores.

The black glass covering the exterior of the first three floors will be replaced by a custom modern 300-foot wraparound glass facade. Images from ad campaigns will be interspersed in windows like billboards; the building has signing rights that don’t require city approval. Floors four through 10 will have LED light panels on the outside of the building. There will be an atrium about 35 feet high on the second level.

Herald Center was built on the site of what once was Saks Fifth Avenue and later E.J. Korvette. The property in the early Eighties was financed by Philippine president Ferdinand Marcos and his wife, Imelda, who conceived it as a luxury shopping mall with early tenants such as Charles Jourdan, Ann Taylor, Alfred Dunhill and Brookstone. But they didn’t last in the location.

JEMB Realty in 1989 acquired Herald Center from the Marcoses and envisioned the property as a big-box vertical mall. The New York State Department of Motor Vehicles also has offices in the building.

JEMB has been planning to renovate the building and was looking for a fashion tenant to fill the primary space when Daffy’s closed. When the off-price retailer filed for bankruptcy protection last year, JEMB entered into an agreement to acquire Daffy’s leasehold interests, some real estate and some intellectual property. JEMB agreed to buy out Daffy’s from its location in its Herald Center property for $10 million and hired CBRE Group to market the space.

Asking rent reportedly was $1,200 a square foot for street-level space, $250 a square foot on the second floor and $200 a square foot on the third.

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