H&M profits plunge 90pc as it keeps clothing prices low

PROFITS at high street retailer H&M plunged by almost 90pc as it scrambles to keep prices lower to lure shoppers in.

H&M, the world’s second biggest fashion chain, said profits were almost wiped out in the three months to November. Operating profits slumped by 87pc to 821m Swedish krona (£64m) after it opted not to pass all its steeper costs on to customers.

Helena Helmersson, chief executive, said the company, which also owns & Other Stories, had been hit by “extensive cost increases”, including high freight costs. H&M ships more of its clothes from Asia than rivals. It said this contributed to a 3.6bn kronor hit to its profits in the three-month period.

H&M has raised prices on some of its clothes over the past year in an effort to offset some of the cost increases, and expects to lift them again this year.

However, Ms Helmersson said: “We don’t want to raise them too much to then have to lower them again, because we have a promise that we’ve made to customers that we should be delivering the best value for money.”