H&M eyes further expansion as earnings drop on higher costs

Kasmira Jefford
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H&M, the Swedish fashion giant, said it plans to press ahead with ambitious expansion plans this year as it reported an unexpected drop in fourth quarter earnings yesterday.

The world’s second largest retailer said it will open 325 stores this year, with most planned in China and the US, up from 304 last year.

It will also launch in new markets including Chile, Estonia and Lithuania and its new more luxurious brand & Other Stories will also open its first stores across Europe this spring as it attempts to catch-up with the wider offering of Zara-owner Inditex.

H&M’s plans came as it reported net profit of 5.29bn kronor (£528m), for the quarter to the end of November, down from 5.36bn kronor in the same period last year, mainly due to higher expansion costs.

The group also warned that January sales are only expected to have risen five per cent due to the colder weather.