Hennes & Mauritz AB (HM-B.SK), the world's third-largest fashion chain by revenue, says it is on track to open 225 new stores this year, despite the global slowdown.

Spokesman Nils Vinge said while the company has acquired several stores from bankrupt competitors and runs risks of financially strapped mall operators reneging on agreements, "We certainly have the resources and capacity to have 225 net openings, opening more [stores] than we are closing." He was speaking on the eve of the opening of H&M's first Beijing store, which will be the 15th outlet in China. The company has added to its outlets at a pace of between 10% and 15% a year. Last year, the company opened 234 stores but closed 18.

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Like others in the industry, the chain has been hit by the global economic crisis, reporting a 12% drop in fiscal first-quarter net profit, to 2.58 billion Swedish kronor ($319.3 million), from the same period a year earlier.

The store has been working to expand its global footprint to offset weakening sales in Europe and the U.S. Aside from plans to open five or six new outlets in China this year, the company will also open H&M outlets in key markets such as the Middle East and Japan. In 2010, the company will open its first store in South Korea. As of February, it had over 1,748 outlets.

H&M's first Beijing location will open Thursday to coincide with the launch of its latest designer collaboration with designer Matthew Williamson, a marketing move to ramp up maximum publicity. Like other mass-market retailers, H&M has run small apparel lines in collaboration with famous designers, such as Karl Lagerfeld and Commes des Garcons, to draw crowds.

China sales, while growing, make up about SEK840 million, or less than 1% of total group sales. The country is more important to H&M as a sourcing area, with Chinese factories supplying a third of the company's inventory. Vinge said H&M has no dramatic plans to change the sourcing mix.

The Swedish company will be the first major foreign retailer opening a store in Beijing's newly renovated Qianmen strip south of Tiananmen Square, an area dominated by local and state-owned enterprises. Conservationists had protested the opening of the strip, a set of period-style looking buildings, which necessitated the destruction of some of the city's ancient hutong alleyways.

U.S.-based Gap Inc. (GPS) and Spain's Inditex SA (ITX.MC), which owns the Zara chain, are the world's two largest apparel retailers by revenue.

-By Mei Fong, The Wall Street Journal