H&M opens shop in pricey Japan amid downturn

TOKYO (AP) _ H&M has arrived in Japan, seeking to woo a notoriously expensive consumer market with the same cheap prices for fashionable items that have made the Swedish retailer a hit in the U.S. and Europe.

Bargains like 299 yen ($2.80) jangling earrings, 5,490 yen ($51) high-heels and colorful 3,990 yen ($37) dresses line Hennes & Mauritz AB's first Japan store, set to open Saturday. The store was shown to media earlier this week ahead of its opening.

The store is right in the heart of Tokyo's glitzy Ginza shopping district, filled with upscale European designer boutiques like Chanel, Christian Dior and Giorgio Armani.

Nearby department stores sell relatively more affordable jewelry and clothing. But even those are marked easily 10 times the prices at H&M, widely known as a pioneer in cheap but chic fashion.

"Fashion and quality at the best prices. It's the balance of those three different elements that we bring to the Japanese consumer," Christine Edman, who heads H&M's Japan operations, said Friday. "What's trendy in New York and Paris is going to be trendy in Japan as well."

H&M's future is still uncertain in this nation where shoppers are extremely finicky and demand quality products and super-courteous service.

It faces plenty of competition from longtime local favorites with their girlish "kawaii," or "cute," look, such as the 109 building in Shibuya, which has grown into a Tokyo tourist spot. With the exception of Japanese who have lived or travel abroad, many have never heard of H&M.

But Hitomi Kimura, 28, who works for an investment bank and has frequented H&M in Europe and the U.S., can barely wait for one to open in Japan.

"I love it," she said, adding she will spend more on a Max Mara or DKNY suit but not on casual fun clothes no one dreams of wearing next season.

While the Gap Inc. of the U.S. and its Japan equivalent Uniqlo are obviously cheap, with all its connotations of unfashionable crassness, H&M boasts trendy designs working women want, she said.

"If you are shopping at H&M, people think it's cool that it's cheap," Kimura said in a telephone interview.

Besides the Gap, which set up shop in Japan in 1995, H&M faces competition from other foreign retailers such as Zara run by Inditex SA of Spain.

The new H&M store is on the same block as one of Zara's 34 stores in Japan. Zara plans to boost that to about 40 by the end of the fiscal year.

H&M, Europe's second-largest clothing retailer in profit, has turned the recent global downturn in a plus for expansion plans as people increasingly look for bargains.

And it's determined to do just that in Japan, a nation where imports successful elsewhere have sometimes failed miserably.

In recent years, U.S. outdoor clothing chain REI, British beauty and pharmaceutical company Boots and European retailer Carrefour all quit the Japanese market.

Still, the idea of an outfit, complete with accessories, handbag and shoes, costing 15,000 yen ($150) — when a T-shirt can cost that much in Japan — is likely to appeal to some.

"Fashion is seasonal so you don't want to invest too much. Women in Japan are practical about this," says Shuri Fukunaga, managing director of Burson-Marsteller in Tokyo, which has retailers among its clients.

H&M plans to open its second Japan store in November, in Tokyo's fashionable Harajuku district, where it will feature a collection created for H&M by Japanese designer Rei Kawakubo of Comme des Garcons Ltd.

Such collaborations in the past, such as those with Madonna and English designer Stella McCartney, have been big draws.

Next year, a third H&M store will open in Shibuya, Tokyo.

H&M has 800 suppliers, mass produces and runs its own stores, eliminating middlemen, to keep prices down.

Although media response has been positive so far in Japan, the real test is only starting, said Margareta van den Bosch, creative adviser for H&M.

"We don't know really until we see with the customers," she said.

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