Aug.t 15 - Sales at H&M, the world's second-biggest clothing retailer, fell unexpectedly in July. Apparel firms have found trading tough in Europe, but the summer heatwave boosted British retail sales by their fastest annual rate in July. Joanna Partridge reports.
A surprise knock in sales at the world's second biggest clothing retailer in July. H&M saw sales fall 1% last month from a year earlier. It's the biggest monthly drop in sales at the budget fashion chain since March. The Swedish retailer has the bulk of its business in Europe. Clothing firms are still finding trading tough in the region - as economic problems have made shoppers less likely to spend. H&M is also facing increased competition in affordable fashion, says Matthew Hopkinson from the Local Data Company. SOUNDBITE: Matthew Hopkinson, Director, Local Data Company, saying (English): "The top supermarkets now are market leaders in that area. You've got the arrival at the value end of the market with Primark. So for me it's all about getting quality fashion very very quickly and you've just got to look at the Duchess of Cambridge's impact, she turns up one day in a blue spotted skirt, the next minute you could be a millionaire if you can get blue spotted skirts into your shop. So I think that's the challenge." In Britain, the July heatwave encouraged consumers to open their wallets. Retail sales rose at their fastest annual rate in over two years. Shoppers splashed out on barbecue food and products for the outdoors. The birth of a royal baby and British sporting success helped retailers to their best July since 2006. Britons' spending may well continue - after new Bank of England Governor Mark Carney reassured households and businesses that interest rates won't be rising any time soon.