Swedish retailer Hennes & Mauritz AB, better known as H&M, announced it would expand into South America, opening a flagship store in Santiago, Chile, during the first half of 2013.
"It is our first step into the Southern hemisphere, and we see great potential for further expansion in this fashion conscious region," H&M chief executive Karl-Johan Persson said in a press release, according to the Financial Times.
H&M's announcement created some buzz, coming soon after Chilean retailer Falabella declared it had suffered losses in the first half of 2012, reported Retail Digital. Though the company declared the losses a one-off, net profit was down by 19.1 percent to 165 billion pesos ($344 million). Falabella also said, however, that sales were up by 15.6 percent. H&M's affordable prices are said to have a fair chance of making a strong debut in Chile's booming retail market.
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Until now, H&M had focused store expansions on Asia and the US to help offset Europe's slowdown, according to Bloomberg. Chile is the second most important emerging market for retail investment in the region, coming only behind Brazil. H&M's competitors in Chile include Inditex SA, whose Zara chain already had seven stores in the country as of January 31.