Swedish fast-fashion chain expects to have stores nationwide within three years
09/19/2024
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Swedish fashion chain H&M will open its first stores in Brazil in the second half of 2025, the company said on Wednesday, in its first interview since revealing its entry into the country, which was announced by the group in 2023.
Valor has learned that the stores are expected to open between September and October of next year, in the cities of São Paulo and Rio de Janeiro. The first stores will be launched in Allos, Iguatemi, and Multiplan malls, as Valor previously reported.
The company has not confirmed these details. However, it stated that contracts have already been signed for the first two stores, said Maria Fernanda De Luca, H&M’s chief financial officer in Brazil.
“There is a well-researched strategic plan in place, and the pace of expansion will, of course, depend on the results [of the stores],” she said. “We had to explain to them [the controlling shareholders] that we are full of regulations, bureaucracies, and that it is already a complex subject to discuss. It’s even a bit embarrassing to address this because it truly takes time to get certifications and approvals, which surprised them quite a bit, as they couldn’t understand it,” she said during a presentation at the Latam Retail Show on Wednesday evening.
After being asked at the event in São Paulo, the company confirmed that, within a maximum of three years, it will have stores in every state. “Perhaps even before that,” Ms. De Luca said. If this progresses, an average of 8 to 9 stores will be opened each year.
Additionally, the plan is to enter the country with “affordable prices,” Ms. De Luca said, ensuring a competitive market position. Other foreign chains, like Zara, have a more premium brand positioning in Brazil.
H&M will also sell locally produced products, in addition to imported items, following a strategic shift by the global leadership.
“When I joined the company, the plan was for everything to be imported, but over time, the global team realized that it wouldn’t be feasible. Some things simply can’t be imported. So, we are working with local partners to purchase national products,” the CFO explained.
When asked about the risks other foreign brands faced in the country, like Forever 21, which ceased operations in Brazil after a few years, the executive dismissed such concerns.
“H&M has never exited any market it has entered, except for Russia, by choice. There’s no point in discussing the economy—we believe in our product. All the markets where we still operate speak for the company,” Ms. De Luca said.
“The Swedes conducted an in-depth study of all the local competitors. We have a luxury partner with expertise here who is also helping us,” said Augusto Krambeck, H&M’s director of human resources, at the event.
He added that the retailer would almost immediately begin omnichannel operations in the country. In other words, the website and store sales channels will already be integrated.
“It will take one to two months to launch the omnichannel,” Mr. Krambeck said.
He noted that H&M has been planning its entry into Brazil for the past ten years. “It’s been ten years of monitoring, ever since we started in Chile. We didn’t come here with just a year and a half of planning. The fact is, Brazil has been through a lot—World Cup, Olympics, recession, impeachment. And H&M wanted to create a ‘buzz.’ This entry would have gone unnoticed,” he said.
H&M has 51 stores and 3,800 employees in Chile, Peru, and Uruguay, after a decade of operations in these countries.
*Por Adriana Mattos, Valor — São Paulo
Source: Valor International