H&M to increase local sourcing as business grows: India CEO

Swedish fashion retailer Hennes & Mauritz (H&M), the first fashion label to open its single brand retail store in India through 100 per cent foreign direct investment route, believes in “when in Rome do as the Romans do”.

The company which got the FIBP nod in 2013, plans to invest over ₹720 crore for 50 stores and will open its first store in Delhi on Friday.

Acknowledging that every country has its own unique challenges for doing business, Janne Einola, Chief Executive Officer, H&M Hennes & Mauritz Retail India, told BusinessLine “…You need to do business in a country, the way the country is built (laws are structured), while keeping your (company) values intact.”

Einola said, “We could look at opening more stores or fewer stores (than the 50 stores) depending on the response. At this stage, we can’t put a number. Our focus is to offer our consumers quality fashion at the right price in a sustainable manner.”

Though, its foray into India comes at a time when competing brands such as Zara and Gap have already entered the country, Einola is not worried.

“India will be our 60th market. We believe that we are entering at the right time. It is a great opportunity as the market is growing and there is a big interest in European fashion.”

The company seems to be focusing on opening large format stores which some analysts believe could pose a challenge for the retailer. But Einola said that the company’s business model allows it to open stores of different sizes according to consumers’ needs and the retail space opportunities.

Asked about future expansion plans, Einola said, “We can confirm that we will be opening our third store in Bengaluru in 2016 (the second in Delhi will open by this year-end). We will not compromise and wait for the right kind of locations.”

On H&M’s sourcing strategy, Einola said that the company has been procuring from India for the past 30 years and as the retailer fulfils its global targets to grow the number of stores by 10-15 per cent, sourcing will increase.

Meanwhile, H&M stores in India will also be linked to the company’s global sustainability campaign — “Close the Loop — sustainable fashion through recycled clothes”. Just as its stores across the world, even at its first store, consumers can hand over their used clothes, which the company will recycle as part of its sustainability initiatives.