The world’s second largest clothing retailer today (29 March) announced that net profit increased 4.6% to SEK2.7bn (US$411.2. over the quarter ended 27 March. Sales rose 13% in local currencies to reach SEK27.8bn. Comparable-sales increased 3% .
“Gross margin fell to 55.8% from 57.8% in the comparable period of the previous year. It said that gross margin declined was due to increased purchasing costs combined with the fact that it did not raise prices to consumers, adding that increased markdowns also contributed to the decline .
“The retailer recorded “very strong sales” over March, with sales rising 22% in local currencies over the same period of the previous year .
“H&M has a long-term perspective, we are investing for the future and we always have the customers in focus,” said H&M chief executive Karl-Johan Persson .
“Despite increased purchasing costs, we have continued to strengthen our customer offering – for example, by not raising our prices to customers. This has contributed to strong sales even if, combined with the increased purchasing costs, it has had a negative effect on the gross margin in the quarter. The increased purchasing costs are due partly to higher cotton prices at the time for sourcing for the quarter compared to the corresponding sourcing period the previous year, but also to our long-term investments aimed at broadening our total offering.” .
“The retailer also confirmed that it plans to launch a new chain next year. Persson said that like Cos, the new chain will be independent and complement the other offerings from the group. “We have great faith in this new brand and we see considerable potential for further initiatives,” added Persson .
“There has been speculation that the new chain will sit in the luxury spac and that designer Behnaz Aram will be responsible for the collection .”
Date:4/1/2012
Source:Daily News Egypt