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H&M’s July sales rise

Swedish brand Hennes & Mauritz saw slightly bigger than expected July sales. There’s optimism in the second half of the year. Local currency sales at the world’s second-biggest fashion retailer rose 10 per cent in the month against a mean forecast for a nine per cent rise. July marked the tenth month of slower growth than a year earlier amid tough conditions for global clothing retail, tougher competition in H&M’s budget segment and several months of adverse weather conditions in some of H&M’s key markets.

H&M’s negative sales trend is however, widely expected to turn around from August as year-ago comparisons get easier. In August 2015 growth was a mere one per cent. July sales were probably supported by discounting and estimated like-for-like sales at the fast-expanding firm were unchanged from a year ago.

H&M has seen profits shrink for three consecutive quarters, squeezed not only by the usually big markdowns, but also by large long-term investments in online technology and new brands and by high purchasing costs in Asia due to a stronger dollar. H&M’s shares rose 2.7 per cent in early trade, trimming the year-to-date decline to less than 8 per cent.

 
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