Photo: Retailers are following a uniform expansion pattern in the new markets. First, they are entering the shopping centres. Their second step is to conquer the shopping strips gradually, as here, on the Twerskaja in Moscow.

The news was sensational: H&M is going to the Middle East and will work with a local partner for the first time. The Swedish retailer made this announcement in February 2006 at its financial press conference. It will open its first stores in Dubai and Kuwait in the fall of this year. This is a big step for H&M since the company is considered to have a conservative expansion policy. Their motto is, it is better to have fewer markets, but to do them right and have them all under control. True to their philosophy, H&M has founded over 1,200 retail branches in 22 countries. The major competitor Inditex (to which Zara belongs, among others) follows a completely different strategy: The Spanish have more than 2,700 stores in 62 countries worldwide and have been active in all 25 EU countries since the end of 2004.

New markets beyond the borders of the EU
H&M is taking new avenues with their move into the Middle East, and is taking on new markets. The H&M example is symbolic for a development that is currently typical for the major retailers. Whether New Yorker, Gerry Weber or Mango – after many textile retailers have established themselves and are currently expanding in the new EU states of Central and Eastern Europe, the new focus shifted beyond the EU borders to new markets, such as Bulgaria, Romania, Croatia, Serbia, Turkey and the Middle East.

Douglas is a good example: the Hagen-based perfume retailer has a lot on its plate this year. Head of Expansion, Dr. Marcus U. Hüttermann, plans on opening 100 new stores. One focus is Central and Eastern Europe. Douglas is already represented there in Russia with 17 stores, in Poland with 22, and in Hungary with ten stores. With its store opening in Bratislava, the company just launched its expansion plans in Slovakia. Overall, Douglas now operates in 17 countries. Their focus is now turning to Turkey, where their first stores will be opened this year.

After its attempt to ”conquer” the US-American market proved exhausting, and was terminated, Tchibo now has expansion plans in the countries bridging Europe and Asia. Tchibo just opened its first stores in the shopping centre Cevahir in Istanbul. By 2010, the network of Tchibo stores in Turkey will be expanded to 100 stores. At the same time, the company aims to continue on its path of strong growth in Poland and the Czech Republic.

Deichmann also plans to enter the Turkish market this year. The Essen-based shoe retailer already operates more than 1,600 stores in Europe. For 2007, the family owned company announced plans to enter Croatia. Romania, Bulgaria and the Ukraine are also markets on company head Heinrich Deichmann’s radar.