Hennes and Mauritz Q1 profit climbs

Swedish fashion retailer Hennes and Mauritz AB posted a first quarter profit after financial items of 2.7 billion kronor, up from 2.3 billion kronor in the same period last year, supported primarily by strong sales growth.

“Increased marketing efforts have contributed to the good sales development,” H and M said.

Gross margins slipped a fraction to 56.5% from 56.8%, as sales excluding VAT grew 20% to 15.1 billion kronor. With comparable exchange rates, the increase in sales was 14%.

Average market expectations were for a first quarter profit after financial items of 2.7 billion kronor, and a gross margin of 56.4%, according to a survey of analysts by SME Direkt.

H and M said the lower gross margins are due to increased costs from reintroduced textile quotas and a slightly higher dollar exchange rate.

H and M opened six stores during the first quarter, and closed three. The total number of stores amounted to 1,196 at the end of February compared with 1,069 at the same point last year.

“The start of the season has been delayed due to the cold weather in March. The late spring and the fact that Easter does not occur until April have led to very weak sales mainly in Central Europe,” the company said.

H and M said it plans to open more than 150 stores in the fiscal year 2005/2006, with 54 planned to open in the second quarter, mainly in USA, Germany, Spain, Holland and Poland. Two stores will close.

The company added that it plans to open a store in the Greek capital Athens in the spring of 2007.



H&M competitor to sponsor Sweden’s Olympic team

Six months after establishing itself in Stockholm, Japanese clothing brand Uniqlo has announced it will sponsor Sweden’s athletes at the 2020 Olympics.

H&M competitor to sponsor Sweden's Olympic team
Anna Hasselborg of Sweden's curling team tries out new kit supplied for the country's athletes by Uniqlo. Photo: Henrik Montgomery/TT

The clothing chain, one of the world’s fastest-growing retail companies, is also set to open more stores in the Scandinavian country.

“Swedes are so sophisticated and warm-hearted,” Uniqlo Europe CEO Taku Morikawa said, stressing how welcome his company has been made to feel.

Morikawa was in Sweden to present the partnership between Uniqlo and the Swedish Olympic Committee at an event at Uniqlo’s store on Hamngatan in Stockholm.

Sweden’s athletes wore teamwear supplied by H&M at the last two Olympic Games.

The Stockholm store, Uniqlo’s first in the Nordic region, opened its doors in August 2018. An expansion is now planned on the Swedish market, although Morikawa declined to reveal where.

“We definitely have plans to open more stores here,” he said.

A store will also open in Danish capital Copenhagen in the coming spring as Uniqlo’s holding company Fast Retailing continues its global expansion.

Sales figures in Sweden’s clothing retail sector have seen a downward trend in recent years, with an exception in 2015.

H&M is usually cited as one of Uniqlo’s main competitors.

The impact of a new player on an already-competitive market is difficult to predict, according to the Swedish Trade Federation (Svensk Handel).

“Locally, competition is sharpened, but competition is already fierce. I would be inclined to say that this type of partly new concept store can, instead, help to revitalise the physical retail sector for clothing,” the association’s head economist Johan Davidson said.  

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