* CEO meeting trade minister on Tuesday
* Analyst says move makes sense
(Adds background, analyst)
By Anna Ringstrom and Veronica Ek
STOCKHOLM, Feb 19 (Reuters) - European budget fashion
retailer Hennes & Mauritz said it will apply to open
stores in India, the third-biggest economy in Asia, as it seeks
to expand into faster-growing markets.
The Indian government has been pushing through reforms to
allow foreign retailers into the country to help stimulate the
Like Swedish furniture maker IKEA, which is
waiting for its own application to be approved, H&M hopes to
cash in on a growing urban middle-class with a strong demand for
H&M, the world's second-largest apparel retailer after Zara
owner Inditex, has the bulk of its business in Europe
where demand has been hit by the region's debt crisis.
A spokeswoman for Sweden-based H&M said Chief Executive
Karl-Johan Persson would meet Trade Minister Anand Sharma in
India on Tuesday.
"We will now present H&M and our plans for India. We are
interested in opening stores there. What we are doing now is
preparing to apply to start a wholly-owned subsidiary,"
spokeswoman Kristina Stenvinkele said.
India last year formally eliminated restrictions on foreign
investment in its single-brand retail sector.
Foreign retailers that want to invest beyond the previous
cap of 51 percent ownership will need to source 30 percent of
their goods locally.
Sanford Bernstein analyst Jamie Merriman said it made sense
for H&M to start the application process as the Indian market
was attractive, albeit complicated, for retailers.
"Although, if you think about how long it takes H&M to build
up scale in most markets it's probably going to be a while
before that would happen in India," she said.
(Reporting by Veronica Ek and Anna Ringstrom; Editing by Erica