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H&M plans to open another 240 stores by end of the year

YarnsandFibers News Bureau 2015-09-25 13:00:00 – Sweden

Hennes & Mautitz AB (H&M), Swedish multinational retail-clothing company, known for its fast-fashion clothing for men, women, teenagers and children plans to open an additional 240 new stores this year. In the third quarter, H&M opened 36 new stores, but in the fourth quarter 240 new stores are scheduled to open, most of which will be in China and the US. H&M already has 299 locations in China, but growth in the country’s apparel industry makes it a promising hotbed for retailers.

China, in particular, will account for much of the expected growth, encompassing almost one-third of regional demand for clothing by 2018. As the Asian clothing and apparel sector is expected to grow rapidly over the next five years. Annual average expenditure growth on clothing and footwear, at 9.5%, will comfortably outstrip that of any other region, said PricewaterhouseCooper’s retail consultants in their 2015-2016 outlook report on the retail and consumer products sector in Asia.

Beyond its traditional flagship brand, H&M also owns premium brand Cos. The company hopes to introduce Cos in China as well, catering to the country’s growing upper-middle class.

Cheap prices and a continuous supply of new looks keep customers coming back to chains like H&M and Zara. And according to Ms. Paula Rosenblum, Forbe’s retail analyst. H&M’s success comes amid a growing demand for fast fashion.

But despite fast fashion’s growth, chains including H&M are increasingly facing criticism over both environmental and social justice concerns.

Though fast fashion offers consumers a wider variety of styles, the rising trend has also been tied to growing amounts of textiles in landfills. In the US alone, clothing, footware, and other non-durable textiles generated 12.4 million tons of landfill waste in 2013. Only about 15 percent, or 1.8 million tons of the textile waste was recovered for reprocessing or recycling, reported the US Environmental Protection Agency.

Furthermore, many fast fashion retailers rely on cheap labor to produce high quantities of their products. Many laborers used to come from China, but with rising wage demands, companies have looked to Taiwan, Indonesia, Vietnam, and Bangladesh, among other southeast Asian countries instead.

According to Bloomberg Business, H&M has seen significant growth this year, second only to the Spanish clothing retailer Zara in size. Third-quarter sales grew 16 percent, surging to nearly 46 billion Swedish kronor, with revenue coming in at 39 billion kronor.

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