SOURCE / COMPANIES
H&M’s Sep sales growth wilts in unusually warm weather though profits remain on track
Published: Sep 25, 2014 11:33 PM Updated: Sep 25, 2014 11:38 PM
Fashion retailer Hennes & Mauritz's (H&M) recent strong sales growth has slowed sharply this month as unusually warm weather delayed purchases of cold-weather gear, it said Thursday after reporting quarterly profit in line with expectations.

The Swedish company said sales in the September 1-23 period rose 7 percent, compared with a near-20 percent increase in August, putting September on track to be the slowest month for sales growth this year.

In the six months from March through August, sales growth averaged 16 percent.

In H&M's hometown of Stockholm, which has enjoyed unseasonably warm weather this month, one store had sweaters, scarves, gloves and jackets with faux fur lining in autumn colors of browns and maroon on prominent display.

"September was a little lower than we had planned because some products have not sold due to the warm weather," CEO Karl-Johan Persson said.

H&M reported pretax profit up 20 percent at 7 billion crowns ($974 million) in the third quarter.

Zara-owner Inditex reported that sales growth for the period from August 1 to September 12 in local currencies slowed to 10 percent from 11 percent in the first half.

H&M has said that a drive to increase wages for Asian clothing workers, who have recently been involved in violent clashes in Cambodia, was likely to dent profitability as weak demand and stiff competition made it hard to pass on costs to shoppers.

H&M plans to open 375 new stores this year but said it will delay its launch in India until spring 2015.

H&M also said that online sites launched in Italy and Spain in August and China this month had made a good start. The company, which reiterated plans to open in eight to 10 new online markets next year, was slower than many of its peers to start selling online and now has an online presence in 13 markets, compared with 27 for Inditex.

Zara will join China's fast-growing Tmall online marketplace, run by e-commerce giant Alibaba, in October and Persson said it is possible that H&M could also go that route but would concentrate on its own site in China for now.