After having started with Bucharest, where it opened five of the first six stores, the company is tapping into smaller cities to make for lost years in the local competition with the main rivals (Zara, C&A, New Yorker) which arrived earlier.
Besides the already opened stores and the three new contracts, H&M also has five openings scheduled, in Sun Plaza mall in Bucharest and Maritimo mall in Constanta, as well as in three shopping centers owned by Iulian Dascalu: Iulius Mall Timisoara, Iulius Mall Cluj and Palas Iasi.
“H&M rented around 1,600 square meters, a standard size for the company, in Atrium Arad, Electroputere Craiova and Lotus Oradea each. All major retailers want to expand further and the market is still a tenants’ market, but the trend is no longer as strong as last year,” says Oana Iliescu, co-chief executive officer with DTZ Echinox, which assisted H&M in renting space for six stores.
Against similar sales per store, H&M is likely to reach turnover of around EUR50-60 million next year if stores are opened in the following months in the rented spaces.
On medium term, expansion will lose momentum as the malls with good results are covered and shopping center development slows down. Iliescu believes there is still room for three shopping centers in Bucharest, one in the northern area, Promenada project of Raiffeisen Evolution, and two in the eastern one, namely the malls of Spartac and Electromagnetica platforms.
Outside Bucharest, besides the malls already under construction, projects are likely to be developed only in cities such as Galati, Brasov and Timisoara, which are insufficiently covered, while Arad, Suceava, Cluj or Constanta are markets with enough shopping spaces.
(English version by Catalina Apostoiu; Editing by Loredana Fratila-Cristescu)