Hennes & Mauritz says sales rebound in September after unseasonably warm weather prompted the world's second-biggest fashion retailer to report its weakest monthly sales growth in more than two years for August. As Hayley Platt reports, the world's largest fashion retailer is contuning to expand fast opening three shops every day.
It's business as usual at the world's biggest fashion retailer. Hennes & Mauritz reported healthier sales in September after a poor August which it blamed on a late hot summer. Justin Urquhart Stewart, from Seven Investment Management, thinks H&M should be used to changeable weather by now. (SOUNDBITE) (English) MARKETING DIRECTOR, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART-STEWART, SAYING: "Yes it was affected by August, yes it is seeing signs of improvement but compare that to other companies, like Zara. Apparently their weather problem wasn't as bad as H&M's problem, so I don't know if they have different umbrellas or something like that but there does to seem to be a bit of a mismatch here." September sales rose 12 percent in local currencies. Up from a rise of just 1 percent in August. It's pretax profits were largely unchanged from a year ago at around $820 million. Last week rival Inditex, owner of Zara, also reported a strong start to the autumn season, with sales up 16 percent in the six weeks to September. (SOUNDBITE) (English) MARKETING DIRECTOR, SEVEN INVESTMENT MANAGEMENT, JUSTIN URQUHART-STEWART, SAYING: "We've seen a recovery in most of the euro zone countries and we've seen euro zone retail confidence picking up as well. This is much more of a reflection of that I suspect then you're seeing with the weather." H&M is ploughing a head with its expansion programme It'll open 400 new stores this year. And launch online operations in 32 markets over the next two financial years. Shares fell almost two percent before recovering slightly, the affect of a strong U.S. dollar on purchasing having a negative impact on gross margins.