Johannesburg - Swedish fashion retailer Hennes & Mauritz (H&M), Europe’s second-biggest clothing retailer, is hoping to give South African shoppers that good old quintessential shopping experience that puts everything around the customer.
After launching its first local shop at the V&A Waterfront in Cape Town on Friday, H&M now has its sights set on opening stores in Johannesburg, starting with Sandton City.
Par Darj, the country manager for H&M South Africa, told Business Report that the group would differentiate itself by focusing on what it did best, and that was being a traditional retailer.
He said H&M, popularly known for high-quality yet very easy and affordable fashion, represented what was known in-house as “democratic fashion”.
H&M’s vision is centred on being a retailer of “fashion and quality in a sustainable way”, said Darj, whose career at H&M has spanned major markets, including being country manager for the US between 1999 and 2001, and country controller for H&M England in the 1980s.
Fashion orientated
“In South Africa we see a very fashion oriented market… and there is a very big fashion interest, especially if you look at the middle class and the aspirational market,” he said in an interview on Friday.
He said even people who might not currently have the means to buy fashion represented an opportunity as H&M was about providing affordable, high-quality fashion for all. “We call it democratic fashion,” Darj added.
He said H&M’s core focus was selling fashion not running finance operations, hence it offered no store credit unlike a lot of other retailers.
“If you want to be a bank that is fine. We will focus on retail,” Darj said, noting that a lot of retailers have had their fingers burnt trying to be a bank and a retailer. “We don’t offer credit, but you can pay with your credit card,” he said.
Indeed, South African retailers are currently between a rock and a hard place as high consumer debt weighs on household spending and competition puts pressure on margins.
Darj said H&M’s foray into South Africa had already resulted in about 600 jobs in the run up to the opening of the V&A Waterfront and Sandton City stores. Darj said H&M planned to have as many as 1 500 people employed within 12 months.
“We would like to hire people with a good attitude and an interest in fashion,” he said, adding that some 60 associates had already been sent to Sweden for training.
In the long run, H&M planned to use South Africa as a springboard to the rest of southern Africa, as well as to east and west Africa. H&M was exploring the feasibility of opening a local manufacturing facility, Darj said.
“Last year we opened a production factory in Ethiopia. We are also producing from Turkey. We will see what is possible in South Africa,” he said.
H&M’s arrival caps a busy few months as South Africa’s large shopping centres have already been experiencing good demand for space from other top international brands including Zara, Burberry, Cotton On and Top Shop.
JP Verster, an analyst at 36One Asset Management, said on Friday that H&M would probably learn from the expansion strategies of its peers Zara and Cotton On.
“H&M will choose which expansion strategy to follow in South Africa. It can either choose from Zara, which had a cautious strategy of opening a handful of stores in South Africa, or Cotton On”, which had an aggressive strategy, Verster said.
H&M operates 3 500 stores in 57 countries. Egypt and Morocco have, so far, been the only two African countries where it operates. The Sandton City store is scheduled to open later this month.
* With additional reporting by Ellis Mnyandu (@Ellis_Mnyandu)
BUSINESS REPORT