H&M Report Lower Than Expected Sales Rise

Swedish clothing retailer Hennes & Mauritz today disappointed investors with a lower-than-expected rise in sales last month.The Stockholm-based group said turnover in September increased by 10 per cent, below the 16 per cent that analysts had forecast, but higher than last year's 6 per cent. Shares in the group sank 4 per cent in morning trading.

H&M said weak sales in the first two weeks of September were followed by a good increase in the rest of the month. The group said last month that sales at its 86 stores in the UK totalled 1.35 billion Swedish kronor (£102m/€148m) during the three months to August 31 - a performance helped by the opening of seven stores over the last year. The figures put the UK on course to become H&M's second largest market. Only Germany, where the company has 250 branches, generates more revenue.

The group has 70 stores in the US and plans to move into the Irish Republic and Hungary next year. H&M, which opened its first store in Sweden in 1947, beat market expectations with an 18% rise in profits to 2.45 billion Swedish kronor (£186m/€269.9m) between June and August. H&M began trading in its 20th market during August when its first store in Slovenia opened its doors to shoppers.

The group is planning to speed up its store openings in the final quarter with around 65 new outlets, almost matching its expansion programme during the first nine months of the year. Most of the new stores will be in Germany, although five more outlets are planned for the UK in the final quarter with up to another 12 in the next financial year.