H&M shares jump as online drives sales

Shares in Swedish fashion giant H&M - the world's second-biggest clothing chain - have risen sharply after it reported strong sales growth.

Third-quarter sales at H&M - whose brands include Cos and Monki - were up 11% in afternoon trading, helped by a 32% jump in online sales.

The rise came despite profits falling 19% to 3.1bn krona ($350m; £267m).

The profits fall was caused by problems arising from new logistics systems in the US, France, Italy and Belgium.

H&M - which employs 171,000 people worldwide in its 4,700 stores - also owns Arket and youth brands Weekend and & Other Stories.

It has outlets in 69 countries, with the US, Germany and the UK its top three markets by number of stores.

H&M said the fall in third-quarter profits was caused by "problems that arose during the implementation of new logistics systems in the US, France, Italy and Belgium during the spring (that) led to extraordinary costs". The company said these had now "largely" been resolved.

Chief executive Karl-Johan Persson said: "The rapid changes in the fashion industry are continuing and the H&M group is in an exciting transitional period.

"Our transformation work has contributed to a gradual improvement in sales development with increased market share in most markets during the third quarter, particularly in Germany, Sweden, Eastern Europe, Russia and China."

The main growth channel for clothing sales is online. UK fashion retailer Next has seen orders via the internet almost overtake sales at its stores, while online specialists Boohoo and Asos are seeing sales boom.

In order to keep up with the trend, H&M invested £530m - 45% of its total investments - in its online business in 2017.

The company is also still expanding its collection of stores and plans to open 380 outlets in a variety of countries this year, including Ukraine, Kuwait and Lebanon.