H&M sales rose in July on price cuts

Hennes & Mauritz AB, Europe's second-largest clothes retailer, said same-store sales increased 2% in July as price cuts attracted more shoppers. Total sales at the Stockholm-based company, which released the figures today in an e-mailed statement, climbed 11% excluding currency movements, meeting the average estimate of 16 analysts surveyed by SME Direkt. “For a company the size of Hennes & Mauritz, 2% like- for-like is actually not bad,” said Rebecca McClellan, an analyst at JPMorgan Chase & Co. in London with a “neutral” rating on the stock. “What is absolutely critical is what happens to sales trends in the early part of autumn and winter.” H&M, which sells women's tops for as little as € 4.90 ($6.20), said in June that it would cut prices after inventory climbed 28% from a year earlier at the end of May. H&M is banking on collections commissioned from prominent designers to fuel sales. In May, it hired Dutch duo Viktor & Rolf to make clothes that will go on sale in November, following similar collaborations with Karl Lagerfeld and Stella McCartney. H&M also is selling a Madonna-themed track suit for € 49.80 as the pop star features in its advertising. The company said in June it plans to start a new chain offering more expensive clothes than H&M. About 10 stores will open next year under the new format. (Bloomberg, hm.com)