Swedish fashion chain H&M made an after-tax profit of €2 million in the first full year of trading at its Irish stores, according to accounts filed at the Companies Office. Laura Slatteryreports.
The profit came in the 12 months ending November 30th, 2006, and marked a turnaround on the loss of €1.3 million suffered in 10 months of trading in 2005.
The company's directors said the expansion of new stores in the Republic would continue and, together with increasing sales in existing stores, would contribute to growth in turnover, which increased from €12.3 million to €30 million.
The retailer, which has the full name Hennes & Mauritz, has since seen sales at Irish stores jump 32 per cent to €21.6 million for the six months to the end of May this year, compared to the same period in 2006.
The company opened its fifth store in the Republic last year at the Whitewater shopping centre in Newbridge.
It also has stores in the Ilac centre on Henry Street in Dublin and at the Blanchardstown, Dundrum and Liffey Valley shopping centres, and it is to take a unit at the new South King Street shopping development off Grafton Street.
The company employed an average of 172 employees in the Republic last year and had a total wage bill of €3.6 million, with directors' remuneration coming to some €46,300. Its administrative expenses were €16 million and its operating profit was €2.3 million.
Across the group, swimwear designed by singer Kylie Minogue helped keep H&M's sales strong in the spring and early summer, although the results of a collaboration with another pop icon, "M by Madonna", were not so successful, with the line reported to have been swiftly discounted in H&M stores.
The company is unlikely to have completely escaped the brunt of poor summer weather in Britain and Ireland in June and July, which is thought to have badly affected retailers that had filled their rails with skimpy sundresses and T-shirts only to find shoppers were looking for umbrellas and raincoats.
H&M's clothes are competitively priced and aimed at the younger market, although the company launched an upmarket high street chain called COS (Collection of Style) across Europe earlier this year.
A one-off collection with Italian designer Roberto Cavalli will be launched in selected H&M stores in November.
Worldwide, H&M's main rival is Spanish chain Zara, owned by the Inditex group.
