H&M Expands Stores, Denim Line

It opened 76 stores this year, bringing its worldwide total to 1,134. Newest among them were two units in San Francisco, signaling expansion on the US West Coast, and one in Budapest, which represents its entry into Hungary.

Leif Persson, CFO, says sales were strong in nearly all markets adding that the Great Britain markets "were difficult and slow." Germany is its largest market by far.

For the nine months, the locally based international fashion apparel chain reports net sales of 43.3 billion SEK ($5.5 billion USD), which is an increase of 14% over the same nine months of the previous year. Net profits for the nine months of 2005 were nearly 9.3 billion SEK (or just under $1.2 billion USD), up 33% over the same timeframe a year ago.

CEO Rolf Erikson announced that the company will launch '&Denim,' a new jeans concept, in 400 stores across all markets this November during a nine months earnings report conference call. Of strengthened textile quotas, Erikson says, "quota systems are a part of our daily business. The re-establishment of the quota regulations (on imports from China) makes the buying process somewhat more difficult and can, in a shorter perspective, have a negative influence on the gross profit. But, in the longer perspective, it will have no effect on the Group's result."

He acknowledges that "some knits were held up in customs," but were released. In anticipation of re-establishment of the quotas, he says, "we were cautious about moving production to China and have moved part from China to nearby countries."

Fashion trends for fall include rustic, minimalistic and barococo looks, Erikson says. The new jeans concept opens with a collection of approximately 40 items, created in collaboration with designer Stella McCartney, and produced and marketed under the label, "Stella McCartney for H&M."