No, not for a hollister interview you do NOT dress smart. A friend of mine actually had an interview with them, someone else I know works for them, so I can actually tell you exactly what they're looking for...
Hair:
Entirely natural hair. No unnatural colours. It's best if it's not obviously straightened or curly. Beach waves are good. Updos are a no no, anything that looks like you put a lot of effort into it, no.
Make up (don't know if you're male/female so I'll include it nonetheless)
If they cannot tell you are wearing make up then it's good. Of course, make up does generally give you a confidence boost, so my personal suggestion for this would be: a good foundation that matches your skin PERFECTLY, powder, a natural peach-toned blush, mascara and lip balm. Absolutely no coloured lipstick or eyeshadow, fake eyelashes, etc.
Nails:
No colours. Pale pink, peach, or a french manicure.
Clothing:
For girls - jeans, a tank top, a cardigan on top, and flip flops. Other options are a shirt opened with a top underneath.
For guys - jeans, a TIGHT fitting t-shirt (yes, it has to be very, very tight). A shirt open on top or a hoody over is acceptable, flip-flops.
Converse are acceptable for both, other shoes aren't.
Ultimately, you are supposed to look like you "just walked off the beach". the hollister look is very layered and very casual. Going in formal clothing will show you do not understand the brand, so do NOT do that. When they say dress formal, people generally are talking about office-style jobs. In retail, you dress to reflect the company. if you don't already know about hollister... basically it's 'casual luxury'. Look at the website to see the clothes they sell and you'll quickly be able to tell what you should wear - their clothes basically all look the same.
Of course, it's well known that Hollister hire highly based on looks, so if they've already asked you for an interview you're doing well and have a good chance. Good luck!