H&M share price up, opens its first store in Australia and expands into smaller cities in China

Hennes & Mauritz AB (H&M), which is the second-largest clothing retailer in Europe, announced that it is going to make its first step on the Australian market. The opening of the companys first store in Australia is scheduled for Saturday and will make H&M the latest foreign retailer who expands its reach in the region.

The manager of H&M in Australia – Mr. Hans Andersson explained in the statement, which was cited by the Financial Times: “This is the last part of the world where we don’t yet have a presence. Australia is strategically important for us. The people here are well travelled and the country is an important destination for Asian tourists.”

This announcement comes right after Karl-Johan Persson, who is the Chief Executive Officer of the company, revealed in a telephone interview that H&M becomes more focused on expansion into some smaller cities in China, which is considered as its biggest supply market. H&M also expressed its interest of offering its products in Myanmar, Ethiopia and Kenya.

As reported in Bloomberg, Chief Executive Officer Mr. Persson commented: “The whole country is definitely getting more competitive. We’ve tested second tier-cities and third-tier cities in China and found the concept is working well.”

Over the last few year Australia has become a desired destination for investments due to its relatively flourishing economy. The attractiveness of the country to foreign retailers such as Victorias Secret, Zara, Topshop, and Hollister, is also increased by the fact that Australia is visited by great number of Chinese and Japanese tourists on an annual basis.

The head of retail at CBRE – Mr. Alistair Palmer commented on this trend for the Financial Times: “There is such pent up demand from overseas retailers looking for retail space in prime locations that it is proving difficult for them to get into shopping centres.”

Hennes & Mauritz AB (H&M) rose by 0.32% to SEK 278.60 by 9:02 GMT in Stockholm, marking a one-year change of +20.61%. The company is valued at SEK 405.63 billion According to the Financial Times, the 28 analysts offering 12 month price targets for Hennes & Mauritz AB have a median target of SEK 295.00, with a high estimate of SEK 350.00 and a low estimate of SEK 185.00. The median estimate represents a 6.2% increase from the last price of SEK 277.70.