After its reluctance to enter the Brazilian market, H&M, the giant Swedish clothing retailer, is studying the acquisition of Dutch rival C&A, a large operation in Brazil. Valued at approximately US$60 billion with revenues of US$20 billion dollars last year, H&M competes directly with Spanish brand Zara for the leadership of a market segment that became known as “fast fashion“.
According to Exame magazine, C&A;‘s operation in Brazil is the main target of the Swedes’ interest, who have been studying this move for a while. Largest fashion retailer in Brazil with 210 stores, C&A; experienced inventory and financial difficulties in 2010. But according to a company executive, C&A; operations were recently streamlined and marketing campaigns including renowned designers and model Gisele Bundchen gave new strength to the retailer. A market analyst said that the domestic presence of C&A; and the size of its stores would fit perfectly within H&M’s business model. Officially, the two retailers claim that there are no negotiations in progress but an executive in Brazil’s C&A;, asking anonymity, confirmed that companies’ associates are talking.