Swedish fashion giant’s profits drop by millions

Swedish fashion giant Hennes and Mauritz (H&M) announced on Tuesday that its annual net profit fell by millions of dollars in the 2015-16 financial year.

Swedish fashion giant's profits drop by millions
An H&M store in New York promoting January sales. Photo: Mark Lennihan/AP

H&M explained that its annual net profit dropped by 11 percent due to higher purchasing costs from the rising dollar.

The group, which opened 427 new stores during that year, said its profit fell to 18.636 billion kronor (1.972 billion euros, $2.109 billion) in its 2015/2016 financial year, ending on November 30.

The profit drop of nearly two billion kronor ($226 million) was also a result of “an increase in discounts” after a cold spring in Europe.

“For fashion retail in general, 2016 was at the same time a challenging year in which various external factors – including geopolitical events – had a negative impact on retail trade in many markets,” the company's CEO Karl-Johan Persson said in a statement.

“This was particularly visible in France, Germany, Switzerland and Italy as well as in the US and in China,” he added.

For the coming year, the group plans to open 430 new stores and settle in five new markets: Kazakhstan, Colombia, Iceland, Vietnam and Georgia.

Measured in local currencies, sales jumped by seven percent to 223 billion kronor ($25 billion) in 2015/2016.

For 2016/2017, H and M aims to raise its turnover from shops and online sales combined by 10 to 15 percent.

On the Stockholm Stock Exchange, the group's shares surged nearly five percent in early business, vastly outperforming the overall market which was up by 0.8 percent.

The apparel giant has 114,586 employees worldwide, including nearly 9,000 in Sweden.

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What happens if you don’t pay a bill in Sweden?

Sweden's Enforcement Authority is responsible for collecting unpaid debts, fines, and declarations of bankruptcy. So, what happens if an unpaid bill reaches the Enforcement Authority, and can you do anything if you have a black mark on your record?

What happens if you don't pay a bill in Sweden?

What happens when you have a bill?

Usually, if you have a bill in Sweden, you will receive an invoice (faktura) either digitally or via post, which will include details such as the amount owed, who to pay and the date payment is due (förfallodatum).

If you don’t pay the invoice in time, the person you owe money to may turn the case over to inkasso, or a debt collection agency, who will again send you an invoice for payment, plus the agency’s fee.

If this invoice goes unpaid, the Enforcement Authority will get involved.

The Swedish Enforcement Authority, Kronofogden in Swedish, is responsible for collecting unpaid debts. It does this by providing advice and support to those who are unable to pay their debts, as well as helping creditors – such as, for example, landlords whose tenants have not paid their rent.

The debt collection agency will pass unpaid bills on to them, and you may receive a betalningsanmärkning or black mark on your credit record.

Before you receive a black mark, however, you will first receive an ansökan om betalningsföreläggande from the Enforcement Authority. If you pay this in time, your debt will not be registered as a betalningsanmärkning.

There are some types of payment where you can receive a betalningsanmärkning without the bill going through a debt collection agency first. These are usually payments owed to the state, such as unpaid tax, unpaid student loan repayments or unpaid municipal parking fees.

You are unlikely to come into contact with the Enforcement Authority unless you miss or forget to pay a bill.

What happens if you get a black mark?

A black mark can have pretty major consequences – it can stop you from hiring a car, getting a credit card, borrowing money (including getting a mortgage), taking out a phone contract or even renting an apartment, as well as barring you from ordering anything on credit or paying via invoice.

This is due to the fact that whenever you apply for a loan or credit in Sweden, the lender will check your credit score (kreditupplysning) to see if there is any risk of you not paying up. Many lenders have a strict policy on not lending to individuals with black marks on their credit score to minimise risk, no matter whether the mark is due to an unpaid phone bill or a missed mortgage repayment.

How can I check if I have one?

You can check if you have a black mark by contacting a credit check company – here is a list of all credit check companies in Sweden. Some may charge a small fee for the service, whereas others offer it for free.

One advantage of checking your own credit score before contacting a lender is that your credit score is not affected when you carry out a check on yourself. 

If, however, a bank carries out a credit check on you, this can affect your credit score – it’s usually not an issue if you carry out one or two checks, but a lot of checks in a short period of time could cause issues.

Can you do anything to remove it?

Unfortunately, no. 

All you can do is wait – a black mark will disappear from your record after three years for private individuals or five years for businesses. 

The best strategy is to avoid getting a black mark on your record in the first place – such as by paying your bills via autogiro (direct debit), keeping an eye on your post (as well as your digital post), and paying for items up-front if possible to avoid invoices, rather than using “buy now, pay later” credit services such as Klarna or Clearpay.