H&M eyes Sub-Saharan Africa as next potential market for textile production

H&M, Swedish fashion giant plans to explore Sub-Saharan Africa and other areas in the region for the textile industry. According to Chief executive Karl-Johan Persson, H&M sees huge potential for production in Sub-Saharan Africa for the textile industry.

After placing test order in last autumn, they have started with small-scale production in Ethiopia and will see how it goes. However, it looks interesting.

They are looking at several African countries, like South Africa, said Persson, who praised the business climate in the region

Government officials, Swedfund (the Swedish government development bank) and the NGOs, they all welcome that H&M and other clothing manufacturers are coming in, Persson said.

They know how important it is for job creation and their economies. Most of H&M’s products are currently made in Asia and, according to Persson, there won’t be any dramatic changes in the distribution of the production in the short-term.

But there could be changes in the long run, he added. That will depend on how prices, quality and lead times evolve. Persson also highlighted the great sales potential in Africa, where many countries are growing very fast, where there is a growing middle class.

South African will be H&Ms third country in African retail expansion after Morocco and Egypt. It expects to open stores by 2015.