H&M is now focusing more on emerging markets as consumer spending slows in Europe and tariffs affect demand in the United States. The company sees big opportunities in countries where it has a smaller presence, like Brazil, Latin America, and India.
The retailer recently opened its first store in Brazil, in a high-end mall in São Paulo. By the end of November, it plans to open two more stores there and four more in 2026, including one in Rio de Janeiro. CEO Daniel Erver said these markets have bigger growth potential compared to mature regions.
The expansion comes as H&M takes a more cautious approach to the United States, where higher import taxes have led to price increases and lower consumer confidence.
At the same time, H&M is reducing its overall global footprint. Its store count has dropped 19 per cent since 2019, now standing at 4,118 locations—the lowest since mid-2016. Around 200 more stores are expected to close in 2025, mostly in mature markets. Rival Inditex, which owns Zara, has also scaled back its stores to 5,528 as of July.
Despite the closures, H&M continues to open flagship stores in key shopping districts to maintain a strong presence in high-traffic areas. Recent openings include locations in Le Marais, Paris, and Huaihai Road, Shanghai.
H&M is also bringing its premium brand, Cos, to India for the first time. The brand offers luxury items like $149 dresses and $299 cashmere sweaters. Delhi will see the debut in the fourth quarter, with Erver highlighting the strong potential for affordable luxury in emerging markets.
Beyond Brazil and India, H&M is further expanding in Latin America. It opened a store in El Salvador earlier this month and plans to enter Venezuela in the fourth quarter and Paraguay next year. This strategy shows H&M’s effort to find new growth opportunities outside its traditional markets.