| SWEDEN'S H&M SET TO OPEN IN GALLERIA |
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H&M, the Swedish clothing chain that spent the past year expanding into the region, plans to open its first Westchester store this spring at The Galleria at White Plains. H&M will open a 23,000-square-foot store the mall is creating by assembling several smaller spaces, including the space vacated in December by Lechters Inc. By signing H&M, The Galleria expects to enhance its position as a mall for middle-income shoppers. Despite more competition in recent years -such as from The Westchester mall, a quartermile southeast -- The Galleria has continued to attract mid-market clothing chains ranging from Old Navy to Forever 21. "It gives The Galleria a tremendous, tremendous leg up on our competition," said Paula E. Kelliher, director of marketing for The Galleria. The new Galleria store will be H&M's fifth in the metropolitan area. H&M's nearest store to Westchester opened last year, at Palisades Center in West Nyack. Also in 2000, the chain opened two Manhattan stores and a store at Garden State Plaza in Paramus, N.J. In all, H&M operates more than 640 stores worldwide. H&M was founded by salesman Erling Persson in 1947 as a womens clothing store with the name "Hennes," the Swedish word for hers. The "M" in the store's name stands for Mauritz, as in the Mauritz Widforss hunting store bought by Persson in 1968. With that purchase, Persson acquired a stock of men's clothing, and his chain branched out into men's wear. H&M (www.hm.com) relies on its 70 designers to create its own lines of clothing, accessories, skincare and cosmetics. H&M reinforces its message of trendy fashions at lower prices than boutiques with magazine H&M -- ads featuring stars like Johnny Depp and Isabella Rosselini. With more than 600 stores worldwide. H&M suffered a 19 percent tumble in profits in the nine months ended last August, to $277 million -- a drop the retailer attributed to price-cutting. Sales during the period rose 8 percent to just under $2.7 billion. For the year ended Nov. 30, 1999, H&M enjoyed a 37 percent pro-tax profit jump, to $504.59 million on sales that zoomed 24 percent, to $3.9 billion. "We are looking to reorganize as quickly as possible and emerge as a leaner company ready to do business," said company attorney Elizabeth J. Austin of the Bridgeport, Conn., law firm Pullman & Comley L.L.C. At its peak, the retailer had 65 stores and more than 800 employees. Austin said the company closed 25 Midwestern stores in an effort to trim some of its "less profitable" locations before filing for bankruptcy protection. After the petition was filed, J. Silver's attorneys filed motions to terminate the leases of the closed stores.
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Austin estimated J. Silver has approximately $2 million in assets and $3 million in debts. The plan is to emerge from bankruptcy sometime this summer operating a core of 35 New England stores with approximately 400 employees. Since the company has no secured bank debt, there will be no disruption to its workforce or ability to obtain merchandise to stock existing stores as a result of the bankruptcy filing. J. Silver has two Westchester County outlets, one in White Plains and another in New Rochelle. The chain has six locations in Fairfield County, Conn. Stores in Norwalk, Stamford and Stratford are joined by three locations in Bridgeport. Founded in 1982, J. Silver faced fierce competition from popular chain stores in the late 1980s. Local sales further deteriorated with the opening of the Stamford Town Center mall. Then Cerreta forged a new strategy based on the One Price stores found in the southern United States. He started to sell most items for around $10, but opted against setting a price limit and instead maintained price as a function of cost. Realizing that what worked in the south might not fly in Fairfield County's affluent suburbs, Cerreta moved the concept into inner-city locations and it took off. The company had total revenues of $26 million in 1998. That same year J. Silver announced a plan to spend $2 million to open 60 new stores over two years with the goal of taking the company public in 2001. Around the same time, New York City investment firm ACI Capital Company Inc. made a controlling investment in J. Silver. Cerreta said ACI encouraged him to broaden the company's strategy as part of the planned expansion. "The only error was the type of location. We tried to move into some malls in the Midwest which were more expensive, but the sales volumes didn't change. You can't be a street retailer and a mall retailer at the same time," Cerreta said. By 1999, there were signs that the company may have over extended itself. Cerreta scaled back his expansion plan to only 15 stores, citing a slow-moving permit process in the new markets. As the company enters Chapter 11, Cerreta claims J. Silver is still the leading discount specialty retailer in all of New England. |