H&M will open its first stores in Vietnam next year

H&M will open its first stores in Vietnam next year

Swedish fashion giant Hennes & Mauritz (H&M) is to make its retail debut in Vietnam with the opening of its first stores in the country next year. 

H&M will follow brands such as Zara, Mango and Gap in making its move on the Vietnamese market. In a statement this morning (9 November), the retailer said it has signed for the first store openings in the country during 2017. The number of stores was not given. 

More information is expected to follow in due course, but the retailer has said it will also open stores Colombia, Iceland, Kazakhstan and Georgia next year. 

Sean T Ngo, CEO at VF Franchise Consulting, told local publication Tuoitre News that most international brands are opening stores in Vietnam through franchising, or granting the right to use a firm's business model and brand to a local partner.

Apart from experience, franchisees are required to have a zero-loss business record and must be able to present their business development plan to the franchisor during the bidding process, which explains the success of international brands in Vietnam, according to the CEO.

H&M currently operates around 4,200 stores across 64 markets. Last month, the retailer saw its earnings tumble in the third quarter, hurt by increased markdowns and higher purchasing costs from the strengthened US dollar.

The company had said it plans to open around 425 new stores and move into three new markets in the 2015/2016 financial year, including a move into New Zealand last month. 

H&M Q3 earnings tumble on strong dollar