H&M profit drops 18% on high costs; plans 178 new stores in second half
Stockholm, Sweden — Hennes & Mauritz AB reported Wednesday that net income for its second quarter dropped 18% to $673 million, from $817 million in the year-ago period.
The Swedish fashion retailer blamed higher procurement costs and promotional offers for the lagging performance.
Sales edged up to $5.1 billion from $4.96 billion in the prior year quarter, but gross margin shrank to 61.7% from a previous 65.9%.
Despite higher purchasing costs and a weak U.S. dollar, H&M said it remains focused on growth. CEO Karl-Johan Persson said his company sees "great potential for future growth in existing as well as in new markets."
Toward that end, H&M is planning 178 new stores in the second half of this year, with China, Britain and the United States set to be the main expansion locations. Nineteen shops will be closed in the same period.
NRF supports patent provision
WASHINGTON — The National Retail Federation announced that it has sent a letter supporting Section 18 of H.R. 1249, the America Invents Actfrom NRF SVP government relations David French to House Judiciary Committee Chairman Lamar Smith, R-Texas, Ranking Member John Conyers, D-Mich., and other members of the committee.
In the letter, French expressed support for Section 18 of the American Invents Act of 2010 because it wouldprovide the Patent and Trademark Office (PTO) the ability to re-examine qualified business method patents against the best prior art.
“Increasingly, retailers of all types are being sued by non-practicing entities for infringing low-quality business method patents which touch all aspects of our business: marketing, payments, and customer service to name a few aspects. A vast majority of these cases are brought in the Eastern District of Texas where the statistics are heavily weighted against defendants forcing our members to settle even the most meritless suits," wrote French.
According to French, Section 18 would help create a more unified patent system.
Aldi opens store in enclosed mall in suburban Chicago
New York City — Discount grocer Aldi has made its U.S. mall debut, opening in Westfield Chicago Ridge, an 800,000-sq.-ft. enclosed shopping center in Chicago Ridge, Ill. The mall is a property of The Westfield Group.
The 20,000-sq.-ft. store offers the same prices and products as other Aldi stores, and also features the retailer’s current interior prototype elements. The store is entered through the mall entrances.
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