Fashion retailer H&M is accelerating expansion into emerging markets such as Brazil and India as consumer spending weakens in Europe, its core region, and US tariffs weigh on demand in its second-largest market.
The move is part of chief executive Daniel Erver’s strategy to revive performance and boost profitability at one of the world’s largest apparel retailers by sharpening brand appeal and responding faster to fashion trends. The company is also seeking to fend off increasing competition from Inditex-owned Zara and fast-fashion giant SHEIN.
H&M opened its first store in Brazil in August at an upscale shopping mall in São Paulo. Two more stores are planned before the end of November, with an additional four scheduled for 2026, including a flagship in Rio de Janeiro. Erver noted that the group sees significant untapped potential in new regions, pointing to Brazil, wider Latin America and India as particularly promising markets.
He also expressed caution about consumer demand in the United States during the fourth quarter, saying that US tariffs on imports had forced some retailers to raise prices against a backdrop of declining consumer confidence.
The expansion in emerging economies comes after a sharp reduction in H&M’s global footprint. Since the pandemic, the group has cut store numbers by 19% from their peak at the end of 2019, leaving 4,118 outlets worldwide by the end of last month—its lowest level since mid-2016. A further 200 closures are planned for 2025, mostly in mature markets. Rival Zara-owner Inditex has also streamlined operations, reducing its global store count to 5,528 at the end of July.
In parallel, H&M has invested in high-profile flagship locations in tourist and luxury shopping districts such as Le Marais in Paris and Huaihai Road in Shanghai, seeking to attract style-conscious consumers.
Danske Bank analyst Daniel Schmidt cautioned that the financial impact of the Brazil push remained uncertain. He said it was unclear how much expansion could drive sales growth next year, though he added that the retailer’s initial reception in Brazil had been encouraging.
H&M’s premium brand Cos is also preparing to launch in India with a store in Delhi during the fourth quarter. The line, which features products such as dresses priced at US $ 149 and cashmere jumpers at US $ 299, is positioned to target the country’s growing appetite for affordable luxury. Erver emphasised that India represented a highly attractive opportunity for Cos and confirmed plans to visit the market in the coming weeks.
The company’s Latin American expansion will also continue, with a store opening in Venezuela later this year and an entry into Paraguay planned for 2026, following its debut in El Salvador earlier this month.
