H&M group plans to slash prices in a bid to shift unsold stock after profits in its first half fell by more than a fifth.
Profit after tax for the six months to 31 May fell 22% year on year to SEK 6,010m (£509.9m), down from SEK 8,354m (£708.7m).
H&M group sales including VAT for the first half edged up year on year to SEK 114,017m (£9.66bn), from SEK 113,907m (£9.65bn).
H&M said profit in the second quarter was affected by weak sales in a challenging market, but also by internal factors including problems with a new logistics system and ”imbalances” in the H&M assortment.
H&M said its inventory was still “far too high”: “The increase in the inventory level is due to weak sales as a result of certain imbalances in the H&M assortment combined with the fact that the transition caused interruptions to the flow of goods in a number of major sales markets.”
“The high closing inventory level will mean increased markdowns in relation to sales in the third quarter 2018 compared with the same quarter the previous year.”
The group announced plans to expand into Bosnia-Herzegovina in 2019 with a new H&M store and it will launch online in Mexico.
This story has been updated to correct inaccuracies.