H&M posts profit increase

H&MStockholm Swedish clothing retailer Hennes & Mauritz (H&M) has reported a rise in fourth quarter net profits although the strong US dollar pushed up purchasing costs.

The company reported profits of 5.9 billion kronor (A$884 million), compared to 5.5 billion kronor in the same period the year before.

Sales in the period from September to November, excluding value-added tax (VAT), rose eight per cent year on year to 52.7 billion kronor.

The group operated 4351 stores, including franchises, at the end of November. That was an additional 427 stores compared to 2015.

H&M said it plans to open about 430 stores this year, including its first stores in Kazakhstan, Colombia, Iceland, Vietnam and Georgia.

The group also planned to continue its online sales, reflecting a “shift in the industry,” chief executive Karl-Johan Persson said.

H&M has 35 online markets and planned to add six more this year: Turkey, Taiwan, Hong Kong, Macau, Singapore and Malaysia.

“2016 was an eventful year which included many positive things but also challenges for us as well as for the industry,” said Persson.

“During the year, we opened 427 new stores net worldwide and added three new markets, and we also rolled out our online store to 11 additional markets, this means that H&M is now present in 64 markets of which 35 offer e-commerce.”

“The year was characterised by the shift in the industry towards an ever growing online market and by digitalisation. We are very pleased that our online business developed very well for all our brands, both as regards sales and profitability.”

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