Swedish clothing chain H&M is gearing up to open its flagship New Zealand store in the Commercial Bay development later in the year.

The 3500sq m store set across four levels - its biggest to date - will open August 30 in the retail and hospitality tower being built on the corner of Customs and Queen St.

H&M New Zealand and Australia country manager Hans Andersson said the retailer would hire 120 workers to staff the shop.

"We'd been looking along Queen St and the area of Britomart for quite some time but decided on Commercial Bay because when it's ready it'll absolutely be the heart of Auckland," Andersson said.

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The Commercial Bay store will be H&M's first Auckland CBD store, and the first to showcase its entire homeware collection.

H&M has a store in Sylvia Park mall in Mt Wellington, which opened in October 2016, and a store in Christchurch and Wellington.

Andersson said he was pleased with the reception H&M had received from Kiwis, and was not fazed by competition.

"There is very tough competition in all markets but we like competition because it keeps us on our toes," he said. "At the end of the day the customer decides, but we're pretty optimistic about the future."

Staff were working hard to fit-out the store before opening and the company had brought workers from Australia to help, he said.

Heart of the City chief executive Viv Beck said the opening of H&M's CBD store was good news for Auckland's retail sector.

"Commercial Bay, with its plans to extend its retail hours into the evening, along with its dining offer will be a significant contributor to the city's buzz," Beck said.

"As one of the first stores to open in Commercial Bay, we can't wait to see a glimpse of how transformative this new development will be for the city."

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H&M plans to open more bricks and mortar stores in New Zealand before delving into online, Andersson said.

Hans Andersson, H&M's New Zealand and Australia country manager. Photo / Supplied
Hans Andersson, H&M's New Zealand and Australia country manager. Photo / Supplied

The retailer was focused on sustainable fashion, he said, offering shoppers a 15 per cent discount on purchases when donating an item of clothing to be recycled.

H&M recycles close to 20 million kilograms of old garments each year and aims to increase that to 25 million kilograms each year by 2020.

"What people don't know is 95 per cent of all fabrics can be recycled," he said. "If you take cotton, there's no shortage in the world today but there will be tomorrow."

H&M clothing is made in Vietnam, China, India, Korea, Philippines and Malaysia.