H&M to open 240 new stores in 2010

H&M announced on Thursday that its second-quarter profit increased 24 percent, but it still narrowly missed estimates due to bad weather for spring sales. It added it will meet its objective of opening 240 new stores this year.

H&M to open 240 new stores in 2010

The clothing giant, third-biggest fashion group in the world after Gap of

the US and Spain’s Inditex (Zara), posted a net profit up 24 percent to 5.21

billion kronor ($668 million), while its before-taxes sales were up 2.0 percent to 27 billion kronor.

Analysts surveyed by Dow Jones Newswires had expected a net profit of 5.26 billion and sales of 27.7 billion. H&M said in its earnings report its results had been affected by cold weather.

“The quarter started with strong sales in March, while sales in both April

and May were affected by unusually cold weather for the season in most of

H&M’s markets,” it said.

It added its gross margins had been boosted by a weaker US dollar, lower

transportation costs and favourable raw material prices.

The chain opened 86 stores in the first half of the year and closed 12. The cheap’n’chic fashion group had 2,062 stores worldwide at the end of May, compared to 1,862 a year earlier.

H&M plans to open 180 stores in the fall. Countries with new stores this year include its main market Germany, the US, Britain, Italy and France

The company, which said earlier this year it was entering the Korean and

Israeli markets, added on Thursday it would open its first stores in Croatia

and Romania in 2011, and would enter Morocco via a franchise at the end of the same year.

Shares declined 1.85 percent to 223.1 kronor on the Stockholm Stock

Exchange, which was down 1.26 percent in morning trading.

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Swedish retailer H&M sees profits slump after Russia exit

Swedish fashion retailer H&M reportedĀ a sizeable drop in third-quarter profit on Thursday following its decision to leave the Russian market.

Swedish retailer H&M sees profits slump after Russia exit

The world’s number two clothing group is among a slew of Western companies that have exited Russia following Moscow’s invasion of Ukraine.

H&M paused all sales in the country in March and announced in July that it would wind down operations, although it would reopen stores for “a limited period of time” to offload its remaining inventory.

The company said Thursday its net profit fell to 531 million kronor ($47 million) in the third quarter, down 89 percent from the same period last year. “The third quarter has largely been impacted by our decision to pause sales and then wind down the business in Russia,” chief executive Helena Helmersson said in a statement.

The group said in its earnings statement that it would launch cost-cutting measures that would result in savings totalling two billion kronor.