H&M's sales jump 17% at its five Irish stores

Swedish fashion giant Hennes & Mauritz (H&M) has reported a 17 per cent rise to €9.1 million (156 million Swedish kroner) in turnover at its five Irish stores in the three months to May.

Turnover in the quarter was up from €7.8 million in the three months to February, which included the Christmas shopping period, traditionally the busiest in the year. The figures include value added tax.

The chain, Europe's biggest fashion retailer, entered the Irish market in March last with a store at Dundrum Town Centre, south Dublin. It later opened another four stores.

Sales in the first two quarters combine to produce a turnover of €16.91 million in the first half of its financial year. H&M's operating profit margin in the euro zone generally, excluding Finland, was 21.6 per cent.

Assuming H&M's profit performance in Ireland was in line with the rest of the euro zone, the Irish unit made operating profits of €3.65 million.

While the latest figures indicate that H&M's business continues to benefit from the boom in retail spending, a spokeswoman indicated that the opening of further stores is on hold for the moment. "We do hope to open more stores, but we don't have anything planned at the moment. For autumn, no," she said.

H&M reported second-quarter pretax profit of €424.75 million (3.92 billion Swedish kroner) on Wednesday.

"The second-quarter report was better than expected, although it also suffered from several factors, which we noted earlier," Jyske Bank's Christian Nagstrup said in a note.

H&M said its sales over the quarter had been weak, implying that the performance in Ireland was above par.

"Even if the trend during the quarter was rising, the total sales level was not reached as planned," the company said.

"Despite this, H&M has taken market share in basically all markets during the first half year, especially pleasing are very good sales in the Nordic countries," it added.

H&M plans to open a new chain of stores for women and men, with 10 shops planned. It said that the new stores would aim at a higher price segment of the market. The retailer also plans a move into China in 2007 and said it had signed contracts for one store in Shanghai and one in Hong Kong.

H&M plans to open about 100 stores during the remainder of its financial year, mainly in the US, Spain, France, Canada and Germany.

It opened 72 stores in the same period last year.