H&M turnover climbs 16%
The UK was today on course to become the second largest market for clothing retailer Hennes & Mauritz after turnover climbed 16% over the summer.
H&M is expected to open four outlets in Dublin. As well as a major outlet planned for the Dundrum shopping centre, already announced in February, it wants a further suburban location and two city centre outlets.
The company said sales at its 86 stores in the UK totalled 1.35 billion Swedish kronor (£102m/€148.6m) during the three months to August 31 – a performance helped by the opening of seven new stores over the last year.
The improvement was faster than the 14% rate of growth seen in the nine months to August 31 and came despite poor weather and concerns over a potential slowdown in consumer spending. Like-for-like sales in the UK were also in positive territory, the company added.
If current growth trends are maintained, the UK should overtake Sweden as the second biggest market of H&M by total turnover during 2005. Only Germany, where the company has 250 branches, generates more revenues.
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/€270.9m) between June and August.
The company said: “H&M recorded its highest gross margin ever in a third quarter, despite a higher level of price reductions than in the corresponding period last year.”
Many of these price cuts – around 4% year-on-year – were introduced to coincide with the opening of its 1,000th store in Boulogne-sur-Mer in France.
H&M also began trading in its 20th market during August when its first store in Slovenia opened its doors to shoppers.
Store openings are due to accelerate 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.
Irish shoppers will be able to buy clothes from the first H&M store to open in the Republic in the autumn of 2005, while the group will also move into Hungary.
H&M added that it had continued to see a “very positive development” in the United States, where it has 70 stores.
Turnover in the US improved by 27% in the third quarter to 853 million Swedish kronor (£64.6m/€94m) at a time when costs were kept tightly under control.
