H&M Gears Up for 3 Indonesian Stores as Retail Sales Growth Climbs

Male and female mannequins are seen in the window of an H&M fashion store, operated by Hennes & Mauritz AB, during a sales promotion in Munich, Germany, on June 9, 2013. (Bloomberg Photo/Krisztian Bocsi)

Male and female mannequins are seen in the window of an H&M fashion store, operated by Hennes & Mauritz AB, during a sales promotion in Munich, Germany, on June 9, 2013. The retail line is set to open its doors in Jakarta in September. (Bloomberg Photo/Krisztian Bocsi)

Swedish clothing retailer Hennes & Mauritz is set to open its first Indonesian store in Gandaria City in September, as well as two other outlets soon afterward.

Hindo Indonesia, the owner of the H&M brand in Indonesia, on Wednesday said that the first outlet would span 2,400 square meters and feature the company’s full collection. The second store, located in Pondok Indah Mall, also in South Jakarta, will span 1,700 square meters and open later this year.

The third store, set to be the largest, will occupy a 7,000-square-meter space at the Grand Indonesia Shopping Town, and is planned to open in March 2014, Hindo public relations assistant manager Karina Soegarda said.

“All this time, Indonesians have had to go to neighboring nations such as Singapore or Malaysia to find H&M products. Seeing this large market potential, H&M will finally open for the first time in Indonesia,” Karina told Indonesian news portal kompas.com. “The entire collection will be the same as those in other Asian nations.”

H&M Indonesia showroom manager Reine Cassandra said the retailer was targeting Indonesia’s middle-to-upper class market with its new stores.

Meanwhile, Indonesia’s retail sales in April rose 9.7 percent from a year earlier, bolstered by information and communication equipment, a Bank Indonesia survey showed on Wednesday.

The growth rate accelerated from a revised 9.3 percent the previous month. But sales fell on a monthly basis due to a contraction in food, beverages and tobacco.

Information and communication equipment include sales of mobile phones and accessories as well as prepaid phone cards.

The survey expects retail sales to grow 8 percent in May, supported by sales of clothing because of mid-year discounts.

However, pressure on prices will increase in the next three months in line with rising demand in the Muslim fasting month and an expected fuel price hike.

The survey of 600 retailers in 10 major cities across the archipelago expects pressure on prices will ease slightly in the next six months as consumption returns to normal after the fasting month.

— Additional reporting by Reuters