The Iconic Swedish fast-fashion clothing brand H&M is to officially open its first store in Ukraine on Aug. 18, and will open its second store in October, the company’s representatives said at a press conference in Kyiv on Aug. 17.
“Its always hard to say is there a perfect time to enter,” said Fredrik Olsson, the Managing Director of the H&M. “We follow many markets usually for many years, and the same is for Ukraine.”
“We think this is a great time, we’ve noticed that there’s been a lot of interest from customers here, interest in H&M, we think it’s very nice to see this positive development here in terms of the economy. There’s a growing middle class, we think that the competitive landscape is really strong.”
H&M has been doing a lot of research on the Ukrainian market, with members of its Stockholm team as well as regional teams traveling to Ukraine to determine whether the country is the right fit in terms of retail landscape, economy and customer demands.
“We think that customers in Ukraine and customers in Kyiv have a strong interest in fashion,” Olsson said.
Ukraine is the 70th market for the global retail chain. Today it has almost 200 full-time and part-time staffers in Ukraine including three store managers, but the company plans to expand rapidly. Many of the Ukrainian staff went through 2-3 months of training in Warsaw, Poland, and Stockholm, Sweden.
As Ukraine is struggling to retain its labor force as many looking for better opportunities outside of the country, companies like H&M entering the country counter the brain drain trend.
“We saw a huge interest,” Fantaccino said. “At the beginning, we didn’t know what would be the reaction but it was I would say very easy to recruit people and a lot of very great potential for the future.”
H&M’s first Kyiv store is located in the 140,000-square-meter Lavina Mall, the country’s largest shopping mall. The shop takes up 2,900 square meters, consisting of homeware (under the H&M Home brand) and clothing for men, women, and children. H&M would not reveal how much it invested in Ukraine or how much it plans to invest in the near future due do confidentiality.
H&M’s Managing Director Fredrik Olsson (R) and Ukraine Country Manager Dominique Fantaccino speak at their first presser in Kyiv on Aug. 17.
“It’s a pretty new mall, with a great range of competitors,” Dominique Fantaccino, Country Manager for H&M’s central European group, said. “And we have a very big space so we can express all of our collections… we wanted for the first store to be able to show all of the diversity of our products.”
H&M’s Ukraine branch belongs to a group of five other countries – Poland, Romania, Hungary, Czech Republic and Slovakia with the main support office in Warsaw – which Fantaccino oversees. Ukraine has a support office in Kyiv consisting of press relations and marketing, accounting, payroll, security, health and safety, construction and human resources departments.
“We will learn what the customer here appreciates, and then we will get a little stronger and better and then we will take step by step,” Olsson said. “You only open a country once, and you only open the first store once, and this is usually for us very, very special.”
H&M has been one of the most anticipated international brands in Ukraine, along with another Swedish brand, IKEA. Rumors that it would come to Ukraine have been circulating for years, but the first official confirmation of its plans to come to Ukraine only appeared in a company six-month report for 2017.
H&M (Hennes & Mauritz AB) is now present in 70 countries with over 4,500 stores. With $25 billion in revenue in 2016, it is the second largest retailer in the world after Spanish Inditex Group. H&M’s competitor IG, better known for its brands such as Zara, Bershka and Pull & Bear, has had a strong presence in Ukraine for years.
“Almost anywhere we go we always face good competitors and I think that is going to be the case here,” he told the Kyiv Post. “We don’t follow anyone… Looking around here, I will say you have almost all of the global strong competitors. It’s not that we are following anyone, but we see it as a very good indication that people are interested in fashion. And looking back, maybe we should have opened earlier.”
H&M is ready to aggressively step in Ukraine’s market, but the H&M representatives would not say whether the international brand will be opening new stores in 2018.
“Of course we’re looking at many other locations in Kyiv but also in other cities,” Fantaccino said. “It’s a big country, so we see great potential here.”
There are still shops in Ukraine that resell overpriced H&M products and Fantaccino says that this will have to stop.
“We don’t accept this kind of practice because we can’t accept that our trademark is used illegally so we will take all necessary actions in order not to accept this,” she said. But the country manager is confident that buyers will prefer to come to the official H&M stores as they can get more competitive prices with a better shopping experience.
In addition to the H&M brand, the company consists of several individual brands like COS, & Other Stories, Cheap Monday, and others.
In collaboration with event manager Lime Agency, H&M has been preparing a three-day celebration of its entering Ukraine.
To launch its opening day, Ukrainian band Brunettes Shoot Blondes will perform at 11:00 a.m. The store’s official opening starts at noon on Aug. 18 and there is expected to be a crowd shoppers lined up at the door.
The store also had a VIP event on Aug. 16 gathering over 1,000 guests. Many Ukrainian celebrities attended the event including pop-singer Jamala, members of the pop-rock bands O.Torvald, Antytilla and THE HARDKISS.
