High street fashion chain H&M yesterday revealed slowing sales in the UK and Europe as it battles against “challenging” retail conditions.
The Swedish firm said UK sales rose by 7 per cent in local currency in the third quarter in a marked slowdown on the 12 per cent hike seen in the previous quarter.
H&M, which has 217 stores in the UK and more than 2,600 worldwide, saw trading across the group come under pressure due to the eurozone crisis and austerity measures.
Sales were also impacted by a heatwave in many of its key markets last month, according to the firm.
It said group-wide like-for-like sales remained flat in the third quarter to August 31, with total sales increasing 10 per cent in local currencies.
But trading has picked up in September, with group-wide sales up 14 per cent in local currencies so far this month.
Karl-Johan Persson, chief executive of H&M, said: “Conditions for the fashion retail industry continued to be challenging in many markets in the third quarter – both as regards the weather and the macroeconomic climate, with austerity measures and restrained consumption.”
The Stockholm-headquartered group posted broadly flat net profits for the quarter, at 3.6 billion kronor (£338m), up just under 1 per cent from a year earlier.
It said results were being buffeted by currency effects, while it is also facing cost hikes in areas such as Asia, although cotton prices have eased back.
H&M said it plans to ramp up expansion.