H&M’s profits fell 20 per cent in the third quarter of 2018, despite the Swedish brand recording a 9 per cent increase in sales, helped by a 32 per cent rise in online sales.

Revenue rose to SEK 64.800m (£5.59m) despite sales decreasing by 8 per cent in the US, French, Italian and Belgian markets because of “the implementation of new logistics systems”, costing around SEK 400m.

H&M has invested heavily in making its online and in-store offerings more seamless, in an effort to compete with online retailers like Asos and Zalando.

The group has seen profits shrink and struggled to shift stock in recent years due to competition from both those brands, as well as high-street rivals such as Primark.

However, the company reassured investors on Thursday that it would not need to cut costs to move unsold clothing in spite of the quarterly dip in profit, and shares in H&M rose more than 11 per cent.

The fashion company’s CEO, Karl-Johan Persson, said: “The rapid changes in the fashion industry are continuing and the H&M group is in an exciting transitional period. Our transformation work has contributed to a gradual improvement in sales development with increased market share in most markets during the third quarter, particularly in Germany, Sweden, Eastern Europe, Russia and China.

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