The 4,305 sq ft (400 sq m) stores will sell clothing at higher prices than its fast-fashion H&M chain. London's Regent Street is tipped to be one of the locations for a store. The name of the new chain has yet to be revealed.
The retailer is also ramping up H&M's footwear offer, which is limited to lighter shoes at present. It will roll out an extended shoe offer of fashion-led styles to 200 stores and will also increase the number of outlets selling shoes.
H&M will enter the Chinese market next year, with store openings in Shanghai and Hong Kong. It will continue to roll out its web offer internationally and will launch a transactional web site in the Netherlands in August.
H&M posted sales of SEK32.13 billion (£2.39 billion) and profit after financial items of SEK6.6 billion (£491.6 million) for the six months to May 31.
H&M will open 100 stores in the second half of this financial year, mostly in the US, Spain, France, Germany and the UK.