H&M Opens First U.S. Store
NEW YORK (AP) _ Hennes & Mauritz opened its first U.S. store on Friday, attracting thousands of shoppers who were eager to grab up the cheap-yet-chic clothes from the popular Swedish chain.
From curious New Yorkers to European tourists, they piled into H&M’s store on tony Fifth Avenue, combing through the racks filled with fashionable $9 shirts and $20 pairs of pants.
The enthusiastic crowd offered a temporary distraction from troubles that beset H&M last week, when its chief executive quit and the company reported a 12 percent drop in projected quarterly profits.
Stockholm-based H&M has built a strong reputation for offering trendy fashions at affordable prices. Founded in 1947, it now has more than 600 stores throughout Europe and is planning on an aggressive expansion into the United States.
Its first stop here is in the New York area. Five stores are slated to open during this year, all in popular malls and shopping destinations.
That will surely cause concern among its rivals, such as the Gap and Limited, which will be forced to compete with H&M’s low prices and constantly changing merchandise assortment.
``The arrival of H&M could be a devastating blow to their competitors,″ said Kurt Barnard, a retail consultant and president of Barnard’s Retail Trend Report in Upper Montclair, N.J. ``They will put pricing pressure and fashion pressure on everyone else.″
Shoppers were eager to see what this new chain _ which is often called the Ikea of the clothing business _ was all about on Friday as the doors swung open at the New York store.
Some went straight for the $35 flared-bottom jeans and $9 fake pony-hair bags, while others stuck to the men’s nylon jackets for $25.
``They are right in style with everything, and I like that about them,″ said Lydia Waldmann of Briarcliff, N.Y., who had shopped at H&M before in Germany and anxiously awaited their U.S. debut. ``Best of all is that I can afford everything.″
Despite the huge crowds on its first day in the United States, there remains some concern about the future of the business.
Last week, the company missed analysts’ estimates with its drop in preliminary quarterly profits. The retailer blamed the earnings shortfall on expansion costs in the United States and Spain.
It also announced the surprise resignation of its chief executive officer Fabian Mansson, who was leaving to join a Swedish Internet company.
That sent its stock tumbling more than 30 percent in overseas trading on March 23, and it remained under pressure this week.
Now there is concern that the stock selloff and the shakeup in the executive suite will stall its ambitious U.S. expansion plans.
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