Raleigh casting for H&M

Apparel chain cheap but trendy

Downtown Raleigh boosters are in talks to bring fashion retailer H&M to town.

For the uninitiated, the Swedish chain is known by its loyal fans for large stores filled with inexpensive but trendy fashions.

The store, which could draw shoppers from throughout North Carolina and beyond, would invigorate downtown and give Raleigh a little more clout with shoppers.

But hang onto your wallets.

Conversations are still very preliminary, said Kristopher Larson, deputy director of the Downtown Raleigh Alliance. Any deal is probably still a couple of years away.

"It's so premature at this point," he said. "But if it were to happen, it would say downtown is becoming a major retail player."

If H&M did come, its store would likely be large. Some of its flagship stores in major cities take up full city blocks. And even though it's not a department store, because it focuses on apparel, the addition would make H&M the first major retailer to operate downtown since Belk closed in 1995.

H&M spokeswoman Lisa Sandberg said there are no plans to open a store anywhere in North Carolina, but did acknowledge the likelihood that H&M representatives have been visiting.

"It is certainly possible, even probable, that our expansion team is looking and meeting with landlords in the area, but we are not able to discuss these meetings in any detail," she said.

The chain has been expanding into the United States since 2000, when it opened its U.S. flagship store in Manhattan. The country now has 101 H&M stores. Last year, the chain's U.S. sales were just over $550 million.

But several hurdles must be overcome before H&M could sign a lease in Raleigh. Among them are the absence of an H&M distribution center nearby and the need for more downtown residents to support the store.

Even if H&M decides to open a store in North Carolina, there's no guarantee it would be in Raleigh. Many chains entering the state choose Charlotte for their first location.

Larson said downtown Raleigh would need about 10,000 residents for major retailers to give Raleigh a serious look.

Right now, about 5,000 people live within a mile of the center of downtown, according to estimates from the Downtown Raleigh Alliance. That number is expected to double by 2009, Larson said.

Larson said the Downtown Raleigh Alliance is always looking for retailers interested in downtown but only actively recruits a small handful at a time.

There are several factors in Raleigh's favor, said Marshal Cohen, chief analyst for research firm the NPD Group. H&M tends to favor downtowns and its drawing power makes the retailer less afraid to venture into developing areas.

"If they know they can be part of the reshaping of the landscape, it works for them," he said. "They know the consumer that's seeking H&M is willing to drive downtown. They recognize that they can perpetuate the foot traffic, which puts them in a unique position."

Even though the deal is far from done, word that H&M is considering Raleigh was exciting for shoppers familiar with the chain, such as Raleigh resident Erica Steimetz.

"When I am in New York, I stop in and see if there's anything I can't live without," said Steimetz, 23, who is the manager at the Glance Gallery in Raleigh. "It's a good place for catching up with trends but not spending a lot of money, because trends don't last. There's not many places like that."

(Staff writer Jack Hagel contributed to this report.)