Swedish fashion chain Hennes & Mauritz is going to launch a new retail formula for men and women next year. The new chain, which will have a brand new name, is geared towards a higher market segment and will carry higher-priced items. The company made the announcement while revealing the results for the second quarter. H&M said that although prices would be higher than its current offering, they would still be lower than the competition’s in the higher market segment. In 2007, the new chain will open 10 stores. No further information was given or is known about the locations of these stores. Nor were any other details given, although Nils Vinge, head of investor relations for the chain, told WWD that he expects more information to be forthcoming in August. It is, however, certain that H&M will open its first stores in the Chinese market. Two stores will open in Shanghai and Hong Kong in the spring. The group simultaneously released its results for the second quarter on Wednesday. Profits for the quarter had risen to 3.92 Swedish kronor (£292 million), while sales gained 7 percent to 17.06 billion kronor. In May, sales rose 13 percent. The profit rise was partly due to the opening of about 50 stores in Europe and the US. By the end of May, the chain had 1224 stores in total. The company is planning to add another 13 percent by the end of the year. In September the first H&M stores will open in the Middle East, in Dubai and Kuwait. Although the results were in line with analysts’ expectations, Vinge called them “weak”, especially in the German and Austrian markets. H&M’s biggest competitor, Spanish Inditex, realized a profit gain of 20 percent in the past quarter. He did, however, admit that sales were improving, especially in the Nordic countries, in France and in Spain.
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