Sweden H&M Opens Its First Flagship Store In Southwest Chongqing

Europe's largest apparel retailer

Longhu business executives said yesterday that they had known more than half a year with H&M in Sweden, and the two sides had learned many times before they finally held hands.

It is said that H&M is more critical of partners' choice, and local commercial ports, area and per capita consumption level should be considered.

Hand in hand with H&M, Longhu business has also upgraded its image, including upgrading the H&M delineated store, including the installation of glass curtain walls.

It is understood that H&M settled in the North City Street, the original Milo coffee and the upstairs floor of the thousand thousand noodle, with a total area of nearly 2000 square meters.

Founded in 1947, Sweden H&M is the largest garment in Europe.

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H&M, a Swedish fashion giant, recently made predictions for its second quarter profits, suggesting that rising costs and stronger US dollar may hurt expected gross margins.

With the slow recovery of consumer confidence after the financial crisis, the world's third largest clothing chain, known for its low price and joint efforts with famous designers, has increased consumer demand in major markets.

However, H&M is still facing challenges ahead. The strong US dollar may drag its gross margin growth, and the abnormal cold April and May caused too much spring inventory to the company, resulting in a third quarter price reduction.

Anne Crichlo, an analyst at Societe Generale, said: "currency trends do not bode well for H&M.

You may say that the gross profit margin is good this year, but the subsequent gross margin may not be impressive and will bring worries to the market.

Carle, chief executive of H&M Chauhan Persson, said the external advantages that support H&M's gross margin growth may be due to appreciation of the US dollar and the renminbi.

Carle Chauhan Persson continued: "looking forward to the future, the negative effects of currency, pportation prices and many other factors will be unfavourable to us. Therefore, all things are equal and will have a negative impact on gross margins."

Sales in H&M6 months continued to grow strongly, rising by 22% in from June 1st to 22nd, after a two month decline.

The same store sales in April and May decreased by 6% and 4% respectively, which is 1% lower than analysts' expectations.

Carle Chauhan Persson added: "this may lead to a higher price cut in the third quarter compared with the same period last year."

Inditex, the owner of the Zara clothing chain as a rival, has announced that its net profit in the first quarter will exceed 63% of expected value, because the rapid market entry business model helps to respond quickly to demand recovery.

"Demand has been revived recently, but H&M is not in the best position to take advantage of this recovery," Carych Lo said. "They plan on the scope and quantity of the coming months, and unstable trading conditions may be very difficult to manage."

The company's pre tax profit in the second quarter (March to June) reached 700 million kroner.

Data released recently showed that consumer confidence in the eurozone improved slightly in June as the eurozone debt crisis subsided, but the long-term outlook is still bleak because the debt intensive government from Spain to Britain has implemented a painful austerity policy.

Britain has become the latest country to announce a deficit reduction policy. The British government says it will increase the value-added sales tax from 2.5% to 20% in January 4, 2011.

H&M used to operate mainly in Germany and Scandinavia. The company felt a little pressure in the second quarter, but it was optimistic that the overall optimism of summer sales in June was positive.

"Strong profitability has overcome the weak sales in May, and sales in June seem to be very strong," said analysts at the bank.

Its concern for gross margin rose by 65.9%, just slightly above the average forecast of 65.1% of Reuters survey, because the fashion chain benefited from exchange rate analysts' warnings that the positive exchange rate could soon become negative.

H&M is pushing ahead with its expansion plan, not only in Amsterdam, but also in Turkey market for the first time, and H&M's first new store in Turkey will open in November this year.

H&M has also opened new stores in Europe and China.

Persson added that H&M is studying the possibility of entering the South American market and is able to announce the progress of the plans next year.