India is among the top potential markets for Swedish fashion company Hennes & Mauritz, which plans to open stores in smaller towns as growth continues in the country.
Karl-Johan Persson, CEO, H7M Group, said, "In terms of potential, it (India) is definitely in the top three markets, with more than a billion people living and the country growing."
The Swedish retailer has 14 stores in Indian cities including Mumbai, New Delhi and Chennai and is scheduled to open one in Hyderabad. The company, which plans to invest 100 million in India in the first five years, opened its store in Mohali, near Chandigarh. It hasn’t set a time frame for entering smaller cities in India.
Persson said, "If we continue to do well, we will enter smaller cities in India like we have done in other countries."
The company’s India sales increased more than three-fold in rupee terms in the first quarter ended February 28, according to a statement on its website. H&M opened its first store in India in October 2015 and turned profitable in its first year of operations. The India unit posted sales of `194 crore during the year ended March 2016 and a net profit of Rs.1.4 crore.
Comparatively, larger Spanish fastfashion rival Zara, which started in India in 2010, had a turnover of Rs.149 crore during its first year of operations and a profit of Rs. 22.5 crore.
The Sweden’s largest fashion retailer introduced its aggressive global pricing strategy in India since its entry, prompting incumbent local leader Zara to slash prices by 10-15 per cent, according to sources.
The company has about 4,400 stores in 65 markets and plans a net addition of 430 outlets in 2017.