H&M hit by summer slump

H&M yesterday reported that it could be forced to reduce prices to offload spring stock after unseasonally cool weather hit sales.

The Swedish fashion retailer said demand in April and May was unexpectedly weak despite reporting a 24 per cent profit rise in the third quarter. It added that “this could lead to a higher price reduction level in the third quarter compared to the corresponding quarter last year”.

The company saw same-store sales drop six per cent in April and four per cent last month.

Analysts said government austerity measures had also hit shopper confidence across Europe.

Profit before tax for the quarter from March to May came in at 7 billion kronor (£59.9m), while total sales rose 22 per cent in the first three weeks of June.

H&M’s shares slipped two per cent on the Stockholm stock exchange after the announcement.

The chain will launch a new website in the UK in September.

The world’s third-biggest clothing chain, known for its knock-down prices and celebrity guest designers, has caught an upswing in demand from shoppers in its main markets as consumer confidence edges up in the wake of the financial crisis.

Yesterday, the company said it was positive going foward: “H&M remains positive towards future expansion and opportunities,” it said.