Hej-Hej, Gap! Sexy, Serious Swedes Invade Manhattan With H&M Stores

On the fourth floor of an office building on Fifth Avenue, 50 New Yorkers were preparing to depart for a three-month boot camp in Stockholm, Sweden-land of Ikea, Nokia and Volvo. The traveling troops-the newest employees of Hennes and Mauritz, Sweden’s version of the sprawling, low-priced, high-style chain stores-were watching a training video. On it, H&M’s goateed chief executive, a 35-year-old named Fabien Mansson, was discussing fashion trends and ethics in manufacturing.

Fade to H&M’s 65 young designers-all Swedish and wearing tight black pants and sneakers with very big soles-sketching away at their blond wood drafting tables. They were working together . With each other. With the fabric buyers. No egos. No competition. Not a break-out-on-my-own instinct among them. It was like some Scandinavian dream of enforced social compact brought to Manhattan.

As they listened, earnestly, the throngs of giddy young applicants who had responded to a New York Times help-wanted ad were also studying the “Hello, my name is” stickers of the clipboard-wielding H&M employees among them. ( Hello, Gunnar! Hello, Melker! ). They also gazed at the enormous H&M ads adorning the walls, featuring Johnny Depp looking moody and stubble-faced.

The tape wrapped up with views of pretty, bright factories where Bangladeshi workers were happily stitching away, and shots of enormous freighters shipping carton after carton of nylon cargo pants all over the world. The applicants were ushered inside the offices where each was assigned one European and one American H&M employee to chat with. Very foreign.

“People say, you are so different,” said Per Darj, the lanky, turtleneck-wearing Swede sent by H&M to spread the seed in New York. “We look for personality. We have a different style. We are more interested in the person. It’s about your qualities. It’s about you.

“An American would ask, ‘What have you produced?'” he said, raising his thick brow at the innocence of such a question. “We don’t, because to us you are part of a system, part of a team. How will you fit into our well-being?”

And, most important, how will you convince Americans that they need to shop every single day ? “People say the Americans are less fashionable,” said Mr. Darj. “And that can be, perhaps, outside of the city. But they know quality for a price.”

Mr. Darj thinks he knows the way New Yorkers shop: They spend their money on basics at places like Barneys and go to chain stores for trendy, basically disposable items. Remember hoodie sweaters? That flash in the pan that spread from Marc Jacobs to the Gap in a week. You’ve hardly even paid off the Visa bill, but they’re gone. Buy your trendy things here cheap , H&M begs.

“You see something, then, after six months, it’s-” Mr. Darj made a whisking noise. Gone ! “It works our way, ’cause we are so quick.”

The chain claims to get new merchandise every day and plans to allow its managers to independently mark things down at will-whatever it takes to sell their merchandise to Americans.

The first load of tall, blond Swedes who have taken up residence at H&M’s United States headquarters at 640 Fifth Avenue, to strategize their infiltration of the city with dozens of outposts, think New York has never seen anything like them or their clothes.

“People will look and say, ‘That is not the price,'” said Mr. Darj. “But it is!”

Some of the prices can be reminiscent of Kmart or Target-or at least Old Navy. The styles compare more to Club Monaco’s Girl Friday trousers and skirts or Zara’s snug Capri pants and pony-skin coats. But unlike their rivals, H&M carries everything from larger sizes to maternity wear to baby clothes and cosmetics. And it guarantees that every store-600 so far, worldwide-gets new shipments every day.

“If you want to get the latest fashion,” said Mr. Darj, “well, you come in.”

In March, H&M will open the 35,000-square-foot store at 640 Fifth Avenue in Rockefeller Center and two others in New Jersey malls in Paramus and the Palisades. The chain has also spoken for space on the high-profile site of the former Alexander’s department store, one block south from Bloomingdale’s on Lexington Avenue and 59th Street, where it plans to open another store in 2001.

“It’s part of our global strategy,” said Mr. Darj, who is originally from Stockholm, but fresh from five years situating H&M in Austria. “We’re classy. We are always in the best location.” Ultimately, H&M plans to have as many New York stores as the Gap, and it is investigating-naturally-the most environmentally conscientious way to get its ponchos to America-and fast .

In Rockefeller Center, H&M will be right next door to Banana Republic, where Richard Rappaport, a 25-year-old from Queens who has been hired as a manager, used to work. He’s also worked at Brooks Brothers and Saks Fifth Avenue. But he has never been to Sweden. On Nov. 19, Mr. Rappaport was bouncing around H&M’s Fifth Avenue headquarters thinking about the trip-during which he’ll shadow a native store manager-and how ready he is to become a little bit, well, Swedish .

“But I knew a lot of things,” said the smooth-faced Mr. Rappaport. “A lot of friends over at Banana had, like, sisters out there and stuff. So they said it was a fun city. It was dark. I was, like, ‘Dark?’ Well, O.K., what kind of food do they have out there? Meatballs! That’s what I thought, Ikea and Swedish meatballs, but now doing research and stuff like that, talking to people from Europe, I’m really excited. It’s a whole philosophy. It’s a new way of thinking. In Europe, they take retail seriously!”

“It’s the philosophy of how they do business,” Mr. Rappaport was starting to sound like a new cult member. “It’s a promote-from-within philosophy. There’s no rules or standards that we live by here. We don’t have rules! We live day by day over here. We allow creativity. We’re not a cookie-cutter place, which is a big deal, you know? The idea of being able to impact your markdowns, you know? If it’s not working out, you can mark it down, you know? You have a lot of control over things.”

And he’s getting dental insurance! Hello, socialism!

Mr. Rappaport opened a door onto a room packed full of clothes. “We’re not allowed to buy these clothes yet,” he said. He was trying to keep himself from drooling on a beige ribbed zipper cardigan. “But when we get to Sweden, we’re gonna totally get outfitted.”

As with most chain stores, the clothing is described in relation to the designers it imitates: He held up a gray parka covered with zippers and little bits of orange grosgrain ribbon. “Just like what’s in the Prada window,” he grinned, jerking his thumb northward, toward the Prada boutique, where, yes, in fact, zippery gray things with red grosgrain ribbon were on display. “And it’s like 40 bucks.”

On another shelf were stacks of long, nylon drawstring skirts in a wraparound paisley pattern that looked, if you blurred your eyes a bit, exactly like a skirt made by the Parisian label Paul & Joe that was on the racks at Barneys and Calypso last summer. But the H&M version goes for $20.

Almost every trend of the past few seasons was in evidence: Capris, gauzy, open collared Indian-style shirts and knee-length, button-up twill raincoats, cut quite like those in Chaiken & Capone’s fall collection. But everything was a little brighter than you’d find at Zara or Club Monaco. It looked like it could quite easily go with one of those colorful backpacks or track suits you could expect to see on, say, a Swedish tourist. Or your au pair. (H&M once got in trouble, by the way, in London for running naughty underwear ads with teenage girls and the tag line: “What the au pair will be wearing.”)

In the back were some pastel sweaters with sort of Target-like overtones, which Mr. Rappaport brushed right by. “For kids, sort of a Diesel thing going on,” he said as he laid out $10 metal-gray T-shirts in tiny sizes. “For the kids who don’t want just the flowery thingy,” said Mr. Darj.

None of it felt very Prada, though: It was all a bit … itchier .

Being cheap without being cheap , has been the story of H&M. Founded as Hennes in Stockholm in 1947 by Erling Persson, a salesman, it was first just a women’s store. In 1968, it merged with Mauritz, a hunting and gun store, and the merchandise went co-ed. But it had sort of bargain-basement reputation.

“If you said H&M, people just-” said Mr. Darj, wrinkling up his nose.

Gradually, the company focused on quality control and set out to make trendy clothes. Now they work with 1,600 suppliers and have 15 production offices: seven in Europe and eight in Asia. As the promotional video promises, executives visit the factories all the time, checking on labor conditions. (“If we find that a worker is under 15,” says a soothing voice on the video, “we will do our best to investigate, to make sure that child goes to school.”)

H&M has been quite successful financially. It’s still family owned (the chairman of the board is the son of the founder, and he’s got 70 percent voting rights), and its annual sales for the past several years have hovered above $2 billion. In June, right around the time it was sealing the deal on Lexington Avenue, it announced a 51 percent rise in profits for the first two quarters of 1999.

The chain hired American actors like Mr. Depp and Geena Davis to star in its European ads and catalogues. “We like personality,” said Mr. Darj, flipping through old ads. “Look! It’s your niche character. We had him last spring. It’s him!” Is it Gary Oldman? “Gary Oldman. It is! Yes, it is Gary Oldman. Here we like characters. Isabella Rossellini, she’s Polish. And,” Mr. Darj’s face lit up, “she’s Swedish .”

They’ve yet to hit any stumbling blocks during their expansion into 12 countries in Europe. “We were a bit afraid of the arrogant Frenchman,” conceded Mr. Darj of their 1998 venture onto the Rue de Rivoli in Paris.

What if someone asked, What do the Swedes know about fashion? “I mean, why should Swedish fashion be good? Why should it?” he said, stating their argument for them. His reply: “We are European .”

And the French? “They love us!” Already, the chain has six stores in France.

Still, every one of the company’s 65 designers are Swedish and based in Stockholm. “But they roam around the world,” Mr. Darj argued. “They check for ideas and trends. They are not in their high towers very far away. We enable them to have bigger ears than others, perhaps.”

And Mr. Darj talks up Stockholm. “The people in Stockholm know that you can’t just sit around waiting for things,” he explained. And, he said, “Levi’s tested Dockers there. Stockholm was the very first market for Dockers.”

H&M’s very first American market will be New York, where the stores are trying all sorts of things to distinguish themselves. Banana Republic, for example, has added cell phone chargers and Palm Pilot loading stations to its stock at the Fifth Avenue store, next door to H&M’s debut space. “There are a number of ways in which we’re trying to differentiate our stores, from one store to the next,” said Banana Republic spokesman Cindy Capobianco, “and from the other brands out there.”

H&M will impress with its “range,” said Mr. Darj. “If you are more like the classy style, then we have that. If you are the young lady who likes the latest fashion, we have that. Five, six lines for women, three or four for men. There’s nothing that operates like it,” he said. And, H&M’s executives, said they’ll be able to keep prices as low here as they are in Europe, where pretty much anything can be had for under $75. But so can a lot of the merchandise at Club Monaco, Zara and the Gap.

“Now, more than ever, the consumer is really king,” said Teri Agins, author of The End of Fashion . “People have enough options. The challenge is bringing something new to the party. [H&M] is going to have to take market share from somebody else. It’s not like this market is getting any bigger … There’s just too much product in the pipeline. Everyone’s doing it, and everyone’s doing it pretty well.”

Tell that to store manager Richard Rappaport, practically transmogrifying into a Volvo as he decides what to pack to meet his adopted countrymen.

“We’re totally gonna bond,” he said. “But I hear it’ll be really dark there.”