H&M joins a growing number of international retailers looking to capitalise on Africa’s fast-growing middle class.
Brand South Africa Reporter
Sweden’s H&M, the second-biggest clothing retailer in Europe, announced on Thursday that it had signed a contract to open a store in South Africa – its first in sub-Saharan Africa.
“The store is planned to open at the earliest in 2015 and will be a full concept flagship store,” the company said in a statement.
“We are very excited to announce the opening of an H&M store in South Africa,” said H&M CEO Karl-Johan Persson. “We see great potential for further expansion in this region. We look forward to bringing fashion and quality at the best price to the customers in South Africa.”
It was an auspicious day for Stockholm-list H&M, with its share price rising to its highest in 11 months on Thursday following the South Africa announcement and a ratings upgrade from Barclays Plc.
According to financial news agency Bloomberg, Barclays’ analysis indicated that H&M’s sales growth would accelerate in 2014 and could even outpace that of its main rival, Spain’s Inditex Group, which owns the Zara chain, in the coming decade.
Persson, in a six-month report released by H&M in June, said the company had opened nearly 100 new stores in the second quarter, including its first store in the southern hemisphere, in Santiago, Chile.
H&M joins a growing number of international retailers looking to capitalise on Africa’s fast-growing middle class and South Africa’s position as a financial and logistical gateway to sub-Saharan Africa.
Last year saw the opening of three Zara stores in South Africa – in Johannesburg, Cape Town and Durban – with US retailer Gap Inc following with two stores and saying that more could follow.
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