H&M, the Swedish retailer, will open the first women-only department store in Saudi Arabia as part of moves to bring more women into the country’s workforce.

The store, which will be H&M’s first in the country, will be staffed entirely by women in what is understood to be a landmark concession by the Saudi Government. Saudi Arabia has strict laws that prohibit the public interaction of women with men other than their husbands. These extend to restrictions on working and driving. As the store will be staffed by women, the Government has insisted that only females will be able to shop there.

Small female-run stores already exist in Saudi Arabia but H&M, otherwise known as Hennes & Mauritz, will be the first major retail outlet to be staffed by women. It will open in a shopping mall in Riyadh this year and will be operated by the Alshaya Group, a retail company based in Kuwait.

Mohammed Alshaya, the chief executive, told delegates at the World Economic Forum (WEF) in Sharm el Sheikh yesterday: “We will increase the number of women working for us and will have 40 in Saudi Arabia. H&M is embarking on an innovative development to open a store with women working in it. It will have challenges, but we have to do it as this is part of our social responsibility to women in Saudi Arabia.”

H&M said earlier this year that it will open 190 stores this year. Franchised stores operated by Alshaya are expected to open in Saudi, Bahrain, Oman and Egypt. The company is expanding rapidly and reported profit growth of 21 per cent to 9.17 billion Swedish kronor (£784 million) last year.

Education is one of the main themes of this year’s WEF meeting in the Middle East.

President Bush told the forum that the region could not expect to create vibrant economies capable of competing in global markets if only 50 per cent of the population was able to contribute.

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