Profits after tax at H&M’s UK arm dropped by 74% to £7.5m for the year to 30 November 2018.
Despite operating profits slumping by 68% to £12.2m, H&M found “the business performed well considering the challenging retail environment”. Gross profit edged up by 1.5% to £561m while revenues were flat at £1.1bn.
H&M’s UK net sales represented 6.5% of H&M Group’s total gross sales worldwide, making it the third-largest market in the retail group. H&M continued its UK expansion during the period, opening 23 stores in 2018. It closed 12, leaving a total of 304 stores operating in the UK at the end of the year.
Drapers revealed in June that H&M Group is asking landlords to accept turnover-based rents as part of any tenancy agreement for lease renewals and new stores.
The fashion retailer closed its Oxford Street store last month ahead of major refurbishments, and will relaunch it in spring 2020.