Sales at fashion retailer H&M disappoint

Swedish fashion retailer H&M said September sales rose 10 per cent.

Swedish fashion retailer H&M said September sales rose 10 per cent.

The performance was well below expectations and wiped $789.2 million off its market value. The company's shares fell over 3 per cent in early trade.

H&M, known for its trendy but inexpensive product range, had been expected to post year-on-year sales growth of 16 per cent, helped by the opening of new shops, according to consensus estimates.

"This is a major disappointment because we thought this would be a sweet spot in the year's cycle," an analyst said.

READ MORE

"A weak sales development during the first two weeks was followed by a good increase during the remaining part of the month," H&M said in a statement, offering no further explanation.

Analysts said H&M blamed the weather which was unseasonably warm for part of the month, discouraging customers from buying winter clothing. "The stock is highly rated so people put a lot of weight on top line figures," the analyst added.

H&M is to open a flagship store on Dublin's Henry Street. Zara, the other fashion giant, has already given a major boost to the street by moving into the redeveloped Roches Stores beside the ILAC centre.