Stocking too many clothes harms H&M

H&M profits dropped by almost a third as it struggled to shift stock.

The world’s second-biggest fashion company saw profit fall to £701m from £510m, a drop of 28pc, though sales were flat.

H&M group, which comprises brands including Cos, Weekday and Monki, has been setting up a new distribution system to allow it to get products into stores faster, but said the transition had caused problems in some major markets.

Chief executive Karl-Johan Persson said: ‘As we signalled previously, it was going to be a tough first half. We went into the second quarter carrying too much stock and we still had some imbalances in the H&M assortment – something that we are gradually correcting.

‘As part of our transformation work we are transitioning our logistics systems to make our supply chain even faster, more flexible and more efficient.’