Swedish retail giant H&M to cut down store space

From operating large retail stores, Swedish retail giant Hennes & Mauritz (H&M) will now settle for smaller stores. Expensive retail estate and space crunch in malls are the reasons behind this decision.

The new stores will now be spread out over 15,000-17,000 square feet as against 25,000-50,000 square feet space. The flagship stores in different cities will be in the range of 30,000 square feet while all the other stores will be around 15,000-17,000 square feet. Presently, H&M operates six stores in India in the Delhi-NCR, Bengaluru and Mohali that are around 25,000-37,000 square feet each.

So far, the retail giant has opened large format stores. The recently opened one in Noida at DLF Mall of India is spread out over 40,000 square feet while the one in Mohali is spread out over 26,000 square feet. The soon-to-be-opened store at high street Phoenix and Phoenix Marketcity are spread over 30,000 and 37,000 square feet respectively. At Delhi’s Select Citywalk Mall, H&M clocks revenues of about Rs 12 crores per month from its 25,000 square feet. In comparison Zara rakes in Rs 10.5 -11 crore from its 17,000 sq ft shop in the same mall.

It was in 2013 that H&M was given the government nod to invest Rs 700 crores to roll out H&M branded outlets in India. The company plans to open 50 stores in India over the years. In Idia, H&M directly competes with the Spanish retailer Zara and US-based Gap. India’s branded apparel market is growing at 10-12 percent per annum.