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Swedish retailer eyes European, U.S. markets

  • 2002-09-26
STOCKHOLM

Swedish retail giant Hennes and Mauritz posted a 52 percent rise in net profits in the third quarter and announced it would open another 39 stores this autumn.

The company said it planned to open the new stores in the fourth quarter while closing down four during the same period.

Nine of the new stores will be in Germany, and eight each in the United States and Spain. The U.S. openings will bring the number of stores opened there this year to 15.

Hennes and Mauritz, which has built its success on a formula of cheap, mid-range clothes for young people and families, had 809 stores across Europe and the U.S.A. at the end of August.

It said it had achieved improved results in all countries, with "very positive development" in new markets France, the U.S.A. and Spain and had achieved a higher stock turnover rate through shorter lead times and a more even flow of garments.

With its third-quarter net profit of 1.23 billion kronor (136.4 million euros) beating market expectations, the share initially soared 8 percent on the Stockholm stock exchange, before settling at 177.5 kronor, up 3.2 percent on Sept. 18..

H+M said sales rose from 9.34 billion kronor in the third quarter of last year to 10.809 billion kronor, excluding value added tax.

Operating profit meanwhile rose to 1.80 billion kronor, from 1.18 billion a year earlier, corresponding to an operating margin of 16.7 percent.