The recent unveiling of H&M‘s 500th North American store, a 35,000-square-foot unit at the Dolphin Mall in Miami was no cause for relaxation for Daniel Kulle. “The big numbers on top of that include another flagship in Manhattan,” said Kulle, the Swedish retailer’s North American president. Kulle was referring to Westfield World Trade Center, where H&M and sister brands COS and & Other Stories leased a combined 45,000 square feet of space. “The group is the biggest tenant there,” Kulle said, noting that the flagship brand will occupy 25,000 square feet on a corner with a street presence facing the mall.
Kulle said the three brands are negotiating together for space in newer malls, “making sure we have the right co-tenancies.” The two smaller brands “are rolling out and doing very nicely,” he said. “& Other Stores is a very new brand. We’re still working on the concept. We’re looking into all of our markets for & Other Stories.”
Eight-year-old COS is much more established and its expansion this year has been “very successful,” Kulle said.
Included in the 500 store count are 77 H&M units in Canada and 16 in Mexico, which leaves about 400 stores in the U.S. The number of units H&M opens in the future will depend on “how retail is evolving with different channels and how the business is going. Some brands have 900 to 1,000 stores in the U.S. There’s still room to reach 500” in the not so distant future, Kulle said, adding that H&M hasn’t tapped all of the country’s “A” malls, not to mention “B” and “C” centers.
H&M has taken over the U.S. wholesale business of Cheap Monday, its denim-driven brand, from a third party. “We want to have some kind of flagship for Cheap Monday. We want a branding store for Cheap Monday, something in New York and something on the West Coast. We’re expanding Cheap Monday and looking at whether it can also be” a physical retail brand, Kulle said, noting that Cheap Monday is promotionally driven.
H&M’s expansion in 2015 has been “very successful. We’ve seen strong online and strong in-store [performance]. Value retail and fashion is a strong component to getting things right. Online has jacked up significantly. We’re pleased overall.”
Kulle said H&M will remain focused on sharp holiday deals such as knit sweaters starting at $4.49, through the end of December.
The retailer in May unveiled its largest store in the world, a 63,000-square-foot flagship in New York’s Herald Square. Kulle said another North American flagship soon won’t be far behind. The Eaton Town Centre store in Toronto is being expanded to 55,000 square feet and slated to reopen in the spring. H&M will enter Puerto Rico, a new market, next year with a unit at the Mall of San Juan.