STOCKHOLM (AP) — Swedish fashion retailer Hennes and Mauritz on Thursday reported a tiny 1 percent rise in third-quarter net profits, saying that although its clothing lines sold well in the beginning of the summer, the European financial crisis and poor weather conditions in August restrained consumption more than expected at the end of the period.
It also said it plans to launch a new fashion brand, & Other Stories, in the first half of next year, which will be located in separate stores. The clothes will focus more on quality and will be higher priced than its normal fashion lines.
The Stockholm-headquartered group posted a net profit of 3.6 billion kronor ($549 million) in the three-month period, up slightly from 3.59 billion kronor in the year-ago period. Aside from lower-than-expected sales at the end of the summer, currency fluctuations also hurt its income.
Revenues came to 33.57 billion kronor, up from 31.51 billion kronor, but the gross margin shrank to 58.2 percent from 58.6 percent.
H&M said it will ramp up its expansion rate for the full year 2012, planning to open 300 new stores instead of the previously planned 275.