H&M fills the Gap in Germany
Swedish retailer acquires 10 –store operation
February 5 2004
Swedish fashion retailer H&M has bought the 10 stores in Germany currently owned by US retailer Gap.
The stores will be rebranded by the autumn, with H&M officially taking over from the US retail giant on August 1. All employees will transfer as part of the deal.
Germany is Europe’s largest consumer market, and H&M’s biggest market outside Sweden, but the country’s economy has been on a downturn recently, creating tough going for many retailers.
H&M has already announced expansion plans in Germany as part of 140 store opening planned for this year. Rolf Eriksen, chief executive said: “Through this agreement we can open 10 new H&M-stores in prime locations around Germany.
“It gives us the opportunity to open some of these stores as so- called concept stores for teenagers, men’s wear and ladies underwear.”
Gap is exiting Germany, its smallest international business, to focus on countries where it sees stronger growth potential. The retailer has about 350 other international stores, in the UK, France, Canada and Japan.
Germany accounts for less than one per cent of Gap sales. Chief executive Paul Pressler said: “It is a difficult decision to no longer serve our valued customers, but our current business model and brand position in Germany make the country less attractive compared to other markets.”
Gap has also announced a same-store sales increase of 3 per cent across the business for January, ahead of market forecasts. In the fourth quarter of 2003, same-store sales rose 3 per cent, with total sales up 5 per cent to $4.9bn.
