H&M delays US online launch as profits disappoint

H&M had planned to launch its online shop this autumn, but said it needed more time to “adapt” for the US market.

The Stockholm-based group reported flat pre-tax profits of 4.9bn crowns (£460m) in H&M’s third quarter, which runs from June to August, blaming bad weather conditions and a tough economic climate. Analysts had forecast profits of 5.37 billion crowns.

Karl-Johan Persson, the H&M chief executive, said: “Conditions in the fashion retail industry continued to be challenging in many markets – both as regards the weather and the macro-economic climate.”

Althought he saw “significant opportunities for continued growth both in stores and online”.

H&M, the world’s second largest fashion retailer after Inditex, said the quarter began with strong sales but said an extreme heat wave in August kept shoppers away.

Total sales for the month up to September 25 increased by 14pc in local currencies compared to last year, in a positive rebound for the company.

Lower cotton prices, which analysts expected to boost profitability, had a “neutral to positive” effect on purchasing costs compared to the previous year, H&M said.

The company is pushing ahead with store expansion plans and said it will add 300 new stores to its 2,600-strong chain this year, up from 275 previously planned.

H&M is also rolling out a new brand, & Other Stories, in spring 2013, which will offer more expensive women’s fashion.

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