Swedish based international fashion retailer H&M saw comparable store sales drop one per cent over its full year period, results released today reveal.
Overall sales were up eight per cent in local currencies but negative translation effects of the Swedish Krona (SEK) dented like-for-like figures for the group.
The retailer, which now has around 2,500 stores in 43 countries, posted profit after financial transactions of SEK 20.9 billion for the 12 months ending November 30th 2011.
This was down from SEK 25 billion the previous year and the firm claimed approximately SEK 1.5 billion of this decline was down to negative currency affects.
Sales during the final three months of the year proved disappointing for the global giant, with comparable store sales down three per cent, but at the start of the new financial year trading bounced with like-for-like store sales up four per cent in December.
Karl-John Persson, CEO of H&M, said: “H&M stands strong in a challenging market. We increased sales by eight per cent in local currencies and continued to gain market share during what was one of the toughest years for a long time for the fashion retail industry in many countries.
“The fact that we have gained market share, proves that our customers appreciate our collections, which offer a wide range of inspiring fashion for everyone.”
Gross margin declined from 62.9 per cent to 60.1 per cent in the year to December with Persson admitting that the situation in sourcing market had been “challenging” but he argued that the retailer‘s decision to keep prices competitive through efficiencies despite increased purchasing costs will strengthen the business in the long term.
H&M‘s global expansion continued apace during the year with a net increase of 266 stores worldwide, with China, the US, the UK and Germany its largest growth markets.
In the current financial year the group intends to open a further 275 stores which will include entry into five new countries and continued focus on the expansion of its Chinese, British and US store networks.
Perrson added: “Bulgaria, Latvia, Malaysia and Thailand will become new H&M markets. We also plan to open in Mexico during the autumn 2012, it will be our first store in Latin America.
“The new year has started well, with strong sales development in both December and so far in January.
“Most indicators suggest that the macro-economic climate in many of our markets will continue to be tough during 2012, but we have a strong belief in our offering and are convinced that H&M will continue to maintain its strong position as the year goes on.”