A decade after launching in Israel, the H&M group is opening a branch of its prestigious & Other Stories brand in Israel, sources inform "Globes." Ofer Malls, a subsidiary of income-producing real estate company Melisron Ltd. (TASE: MLSR), is in talks to open the chain's first store in Israel in the Ramat Aviv mall. The stores in the new chain will have 300-500 square meters, making them smaller than the stores in large cities around the world. It is believed that the new store will open this year.
& Other Stories is the fourth brand brought to Israel by H&M local franchise holder Match Retail. Match Retail, managed by CEO Amihay Kilstein, is owned by Union group, controlled by George Horesh. It appeals to women and also contains accessories. It is much more expensive than the H&M brand, but its merchandise is regarded as better quality, and is aimed at an older age group. The brand's items are currently sold in Israel through UK website ASOS. As of now, & Other Stories has a presence in 19 markets and sales in 63 physical stores. It expanded to Luxembourg and Latvia last year.
H&M group has 17 stores in Israel: 14 H&M brand stores, two H&M Home stores, and one Cos store. The company has no online sales platform, although Zara, its global competitor, already launched its site last year. H&M opened a new store in the ICE mall in Eilat, where customers do not have to pay VAT on its items, but closed down a store in Tiberias.
Such expansion cannot be taken for granted at a time when the fashion industry is facing a crisis in Israel and throughout the world. Only two years ago, Swedish retail giant H&M reported the closing down of 170 branches worldwide in response to online shopping, and closed down Cheap Monday, another of its brands, in 2019. In addition to the brands that H&M currently operates in Israel, it also owns the Arket, Monki, Weekday, and Afound brands.
Since closing down Chief Monday, however, the group has reversed its decline, and reported 11% growth in the first nine months of 2019. The group said in its reports that the transformation it was carrying out had improved its sales, plus an increase in sales of products sold at full price, combined with a drop in products sold at a discount and an increased market share. H&M currently has 5,000 stores worldwide. The group closed down a net of seven stores in the first three quarters of 2019, including the one closed down in Israel.
H&M currently has five stores operating in Ofer Malls: in the Kiryon, Grand Canyon Haifa, Petah Tikva, Rehovot, and Grand Canyon Beer Sheva malls. The company wants to expand this activity. "We see growth potential as a result of the revolution led by the chain's CEO," Ofer Malls general manager Moshe Rosenblum said in response to a question from "Globes."
Match Retail said in response, "We are currently considering expansion of the group and bringing additional brands of the H&M group to Israel, including & Other Stories. A number of different locations are under consideration. When we have something concrete on the matter to report, we will make an announcement."
Published by Globes, Israel business news - en.globes.co.il - on January 28, 2020
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