EUROPE's largest fashion retailer, H&M Hennes, is to set up shop in Worcester High Street.

The Swedish company, which has almost 850 branches worldwide, is to take up a 22,000 sq ft unit in the Lychgate Shopping Centre - scheduled to be renamed Cathedral Plaza.

And the news comes only days after centre developers, Tops Estates PLC, promised to spend at least another £5m developing the site.

H&M Hennes is well-known for its straight from the catwalk, yet affordable designs.

"It's fantastic news," said John Kendrick, Lychgate manager.

"As one of the most prestigious retailers in Europe it is important that they are represented in the city.

"This announcement continues our drive to maintain Worcester as a destination shopping centre in the West Midlands."

H&M will join new stores Next and Slaters Menswear, and present retailers - including Jaeger, Monsoon and Top Shop - in the new-look centre.

"Next will be able to have their expanded range - including home furnishings - all in one store," said Mr Kendrick.

"And Slaters is also an exciting prospect because there is no major menswear store anywhere in the city at present."

Tops Estates' Executive Chairman, Everard Goodman, pledged to spend millions more transforming the Lychgate into one of the region's biggest retail centres.

The process began in January with the on-going redevelopment of Russell & Dorrell's old High Street site, following their move across the city.

Mr Goodman hopes to add an extra 35,000 sq ft of retail space - to be taken from the 102-bedroom hotel - in the second phase of development early next year.

"The space could be better used for the shopping centre," he said.

"Planning permission is available for the first phase.

"For the second it will mean discussions with the local authority to make sure we create something more amenable with the magnificent cathedral."

Three of the five units created by Russell & Dorrell's move have now been filled.

Negotiations with other fashion retailers are said to be at an "advanced" stage.