Fredrik Olsson, H & M: We like to compete with strong brands

The Swedish brand H & M Managing Director said about why the company decided to enter the Ukrainian market, what he awaits from Ukrainian consumers and how he assesses the domestic retail fashion- segment prospects.

On Saturday, August 18, the first store of one of the fastest fashion leaders in the world ─ the Swedish brand H & M ─ was opened in the SEC Lavina Mall. At the last year end, the holding had more than 4,700 stores in 69 countries, but Ukraine was not among its. Now the popular brand products can be purchased in our country, without placing an order through the Internet or going on a shopping-tour abroad.

On the eve of the opening, H & M Managing Director Fredrik Olsson met with the RAU journalist and he answered the most important questions in a small interview: who are the brand oriented on, how brand evaluates the Ukrainian market, and what it expect and what product lines will it sell in Ukraine.

─ Are there already the H & M’s work first results in Lavina Mall? Did you expect such an agiotage and how many people eventually visited the store in the first days?

─ We very much hoped and, of course, expected that the brand lovers would come to the opening, to share a holiday with us and see the store first. The number of visitors in the first days exceeded all our expectations. Over the first two days, the store was visited by more than 20,000 people.

─ Why did you decide to entry Ukraine right now?

─ First of all, I want to emphasize that we are very happy to be here as a company. Tomorrow (an interview was recorded on August 17 ─ ed.) there will be opening our store and we heard that the first customers began to line up (smiling).

We believe that now is the right time to entry: firstly, we have found a good location in the SEC Lavina Mall, which allows us to show in full all our collections ─ men’s, women’s, teenagers, children’s and household goods H & M Home.

Secondly, if we talk about the economy, then for several years we have seen positive trends, we see that the middle class is growing. We believe that our brand will be more than in demand in Ukraine.

─ How do you assess the Ukrainian retail market?

─ We hope that the market is ready, and we will be able to develop successfully, because we have a good offer for Ukrainian consumers. Our strong point and the company main principle is that we offer fashion, quality, good prices and environmental friendliness. The combination of these four factors makes it possible to successfully compete with other operators.

─ Whom do you consider your competitors in Ukraine? We already have Inditex Group stores for a long time, Polish and Turkish brands are actively developing ─ Reserved, LC Waikiki, Koton, DeFacto and others…

─ All the major players, presenting in Ukraine, work in other countries, but this does not stop us. Moreover: I like to compete with it for the buyer’s attention.

First of all, we try to compete with ourselves, achieve maximum results, and then try to beat our own record. I specially spent the time to visit all largest SEC and study the situation with street-retail. And really I saw that there are many strong brands, including sportswear. And, of course, we respect its, watch it, but there is no such that we choose one of it for the role of own main competitors. We try to look at ourselves, learn from everyone and get inspiration from it, especially, as I said, we like to compete. This is a healthier approach to competition.

─ Will you scale the chain further or until you limit to one store?

─ Now we have focused all attention on the first store, so that we give consumers a qualitative shopping experience from the very beginning. But we are already ready to tell you that in October we will open a second store in Kiev SkyMall.

─ Are you considering other cities?

─ We are also looking at other big cities along with Kiev. For us, this is an excellent opportunity to explore and better understand the Ukrainian market. We do not have concrete plans in Ukrainian other cities yet, but we are confident in the Ukrainian market, and we are sure that big cities have high potential.

─ In the future – are you interested only in the SEC or street-retail, too, are you considering?

─ We are opening to both, and to the next. We try to find a place where there are most of our customers. The first such location was found in Lavina Mall, but we are quite ready for opening in street-retail in other cities. We were already on the Kiev main shopping streets and it made a very good impression, including, from the point of view for the retail trade potential. It is important for us to find the right balance between the locations in the SEC and street-retail.

─ How much is H & M ready to invest in development in Ukraine?

─ I understand that you should have asked this question, but H & M never discovers such information. I can say that we invest not only in the physical aspect of the store, but also in the staff.

A year ago we held an open event at which 140 people interested in working with us gathered. We presented on it what and on what terms we offer, and now we have more than 200 employees. Many of them have trained in our stores in other countries to gain the knowledge that is needed to manage the store.

So it’s not just about direct investments in opening stores, but also about investing in personnel, marketing, advertising, promotion, training and so on.

─ What store formats do you plan to develop?

─ The flagship was opened in Lavina Mall, where all our collections are presented. This is correct: consumers acquaint immediately with all the brand capabilities, entering the new market. Later, when we will study Ukrainian buyers, we will understand their preferences and expectations, we will supplement the basic product lines with new collections and formats. For example, we will supplement it with designer collections, studio, and collaborations with famous people.

But while it’s too early to talk about new formats ─ first you need to fully run the store in Lavina Mall and get to know the Ukrainian consumer more closely.

 ─ What marketing activities do you plan and how do you notify about H&M entry the Ukrainian market? Or is this event so significant that it is not necessary?

─ We use a strong marketing mix. The event attracts attention in itself, but we still use all available tools: bill-boards, city-lights, firewalls, printed gloss, radio, Internet, including social chains and so on.

─ Globally, H & M is going through hard times: profit falls, turnover decreases. How does this affect the group entry Ukraine?

─ Now the whole retail industry is going through not the best of times, because everything is changing rapidly. We are looking for opportunities in these changes. Now our key tricks are changing too, but the client always remains in the center and this should not affect Ukraine at all ─ we have found an excellent location, we have gained first-class personnel and we will do the very best we can.

─ Will you open an online-store in Ukraine?

─ In the future, yes, we do. But for now we are focused on opening the first two outlets, and all our energy is sent there. Of course, we want to provide customers with new shopping opportunities and as soon as it becomes possible, we will open for them and the online-purchases opportunity by introducing a multi-channel sales format.

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