What's Italian for "Cheap Chic"?

Hennes & Mauritz (Stockholm), the Swedish clothing company renowned for making low-cost versions of top designers' fashions, will open its first H&M store in Italy next month, near Milan's renowned fashion district.

The 900-unit, 17-country retailer will open a mere 300 feet from the Milan flagship store of Zara, the Spanish-based retailer that is also known for making cheaper versions of high-end styles. In addition to selling its own brand, Hennes & Mauritz has other brand names and a line of cosmetics.

Though H&M has plowed steadily onward in its worldwide expansion program — it has opened 53 stores the first half of this year, including 11 in the United States and its first ones in Portugal, the Czech Republic and Poland.– some feel this is a questionable time to try breaking into the Italian market. The country is undergoing its first recession in 11 years, with analysts expecting the economy to expand a paltry 0.4 percent this year.

“Unless the Italian recession intensifies and lasts for a long time, H&M should be able to weather the storm since their entry into the market will be very gradual,” said a Milan retail analyst. “The current tough economic conditions could also have the positive effect of forcing the company to concentrate on finding out what really works for the Italian market. If they entered during an economic boom there would be the temptation to sit back and hope to benefit from a situation of general increased consumption. The problem with that is that when there is a downturn they wouldn't be ready to confront it.”

Hennes & Mauritz has transformed itself from its founding 55 years ago as a provincial Swedish clothing maker into an international colossus that opens about 100 stores a year and had sales in 2002 of 53 billion Swedish kronor (or $6.2 billion U.S.).

''Italy is one of the biggest retail markets, so it is important that they are finally arriving,” said a Swedish analyst. ''They always wait until they have the perfect location for the first store in a new country. They usually get the right spot. We'll see if they got it in Milan.”