P2JW17603A-0-B00800-10010B220A0 06/25/2010 WE

CMYK Composite DE,DN,FW,HW,LA,RI,TS,UT

B8 Friday, June 25, 2010 THE WALL STREET JOURNAL.

MARKETPLACE
Bloomberg News

A Hennes & Mauritz sales assistant replenishes stock at an H&M store in London on Wednesday.

H&M Will Stay in China

Despite Likely Rise in Costs
BY JOHAN ANDERBERG
STOCKHOLM—Hennes
Mauritz AB will be affected by
any appreciation in China’s cur-
rency but has no plans to move
its manufacturing, the Swedish
fashion retailer’s chief executive
said.
“Costs there will probably go
up,” Karl-Johan Persson said in
an interview Thursday. Analysts
estimate that about a third of
H&M’s products are made in
China, where the government re-
cently signaled that the yuan’s
exchange rate will become more
flexible. The move is seen as an
effort to appease U.S. politicians,
who have complained that the
weak yuan unfairly boosts
China’s competitiveness.
“No one knows what is going
to happen here,” Mr. Persson
said, “but bear in mind that this
is just one of many factors af-
fecting our costs. So we see no
need to take action.”
The Stockholm-based com-
pany Thursday posted a 24% rise
in net profit for its fiscal second
quarter ended May 31 to 5.21 bil-
lion Swedish kronor ($670.4 mil-
& lion) from 4.19 billion kronor a
year earlier. Revenue rose 1.9%
to 27.03 billion kronor from
26.54 billion kronor. However,
sales in stores that had been
open for more than a year
dropped 2%.
“There is some cannibalism,”
Mr. Persson said, referring to the
ferocious speed at which H&M
has been opening stores in the
past few years.
“I don’t know exactly how
large that effect is, but it is clear
that our same-store sales num-
bers would have looked a lot
better otherwise,” he added.
During the quarter, the
world’s No. 3 fashion chain by
revenue, behind U.S.-based Gap
Inc. and Spain’s Inditex SA,
opened 86 stores and closed 12.
In the third and fourth quarters,
H&M expects to open 180 stores,
mostly in Germany, the U.S.,
U.K., France, China and Italy.
Mr. Persson, who is 35 years
old and the grandson of H&M’s
founder and son of the majority
owner, took over at the helm of
the retailer a year ago. He said
he was very pleased with sales
in Asia and also singled out Rus-
sia, where H&M plans to open up
a flagship store on St. Peters-
burg’s Nevsky Prospect later this
year.
Positive numbers from U.S.
stores also keep coming in, al-
beit against weak year-earlier
sales, he said.
In Europe, meanwhile, the
picture is more patchy. “Ireland
and Greece still look bad,” said
Mr. Persson, but he added that
there were improvements in It-
aly and Portugal, two countries
that have also be struggling with
huge fiscal deficits.
“A lot of countries will have
to tighten their budgets, and, of
course, that will affect consump-
tion,” Mr. Persson said.But de-
spite overall consumption being
lower than it was in 2007, H&M
has managed to steadily increase
its sales.
“People are shopping less but
we sell more,” Mr. Persson said.
“That’s a good combination.”

WEATHER WATCH AccuWeather.com

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
Edmonton 50s <0 International Forecasts
Vancouver 0s
60s Canada Today Tomorrow Asia/Pacific Today Tomorrow Europe Today Tomorrow
Calgary Winnipeg 70s
10s City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W
Seattle
20s Calgary 72 49 pc 64 46 pc Bangkok 90 79 t 90 79 t Amsterdam 74 57 pc 72 56 pc
Helena Edmonton 74 49 pc 71 48 pc Beijing 98 72 s 95 72 s Athens 81 66 pc 84 69 pc
Portland Bismarck Montreal Augusta 30s
Billings Montreal 73 57 s 68 55 c Hanoi 90 80 t 93 81 sh Berlin 73 57 s 79 56 s
Eugene Ottawa 40s Toronto 76 59 s 72 61 t Hong Kong 89 81 t 88 81 t Brussels 75 57 sh 77 59 pc
Boise Mpls./St. Paul Albany Boston Vancouver 71 53 pc 66 56 c Jakarta 89 78 r 86 78 r Budapest 75 61 sh 85 58 s
Toronto 50s
Pierre Buffalo Winnipeg 74 62 t 78 62 t Karachi 90 83 s 92 84 s Copenhagen 73 53 pc 70 53 pc
Sioux Falls
Milwaukee Detroit Hartford
80s 60s Manila 90 80 t 85 78 t Dublin 70 52 pc 68 54 pc
Reno Salt Lake City
Cheyenne Des Moines Chicago New York 70s Melbourne 59 43 r 53 39 pc Edinburgh 67 58 pc 67 56 sh
Sacramento Cleveland Latin America Mumbai 91 82 r 92 82 sh Frankfurt 75 60 sh 85 63 s
Omaha Pittsburgh Philadelphia
Denver 80s Bogota 65 47 r 64 47 r New Delhi 111 88 s 112 90 s Geneva 78 56 pc 80 57 s
San Francisco Topeka Springfield Indianapolis Washington D.C.
90s Buenos Aires 59 45 s 59 48 pc Seoul 93 68 s 82 67 sh Istanbul 73 62 c 78 64 pc
Las Colorado Kansas Charleston Richmond
Vegas Springs Caracas 83 72 t 85 73 t Shanghai 82 69 pc 82 69 s Lisbon 83 63 s 82 61 pc
City St. Louis Louisville 100+
Lima 72 59 s 71 58 s Singapore 84 79 sh 88 79 sh London 79 59 pc 79 59 pc
Wichita Nashville
Los Angeles Santa Fe Charlotte Raleigh Mexico City 77 55 t 79 55 t Sydney 68 48 c 67 44 r Madrid 90 64 sh 88 64 pc
100s Oklahoma City Memphis Warm Rio de Janeiro 81 69 s 78 66 s Taipei 90 78 r 92 79 r Milan 81 64 t 82 65 s
San Diego Phoenix Little Rock
Albuquerque Columbia Santiago 59 37 pc 55 30 c Tokyo 80 72 pc 83 72 sh Moscow 86 63 s 84 62 s
Tucson Birmingham Atlanta Cold Sao Paulo 79 58 s 73 58 pc Nice 79 65 s 77 65 s
Dallas
El Paso Ft. Worth Paris 83 60 s 85 63 s
Jackson Africa/Middle East Prague 73 57 sh 78 56 pc
Mobile Jacksonville Stationary Caribbean
Austin 90s Baghdad 102 69 s 103 70 s Rome 81 63 s 82 64 s
New Orleans Orlando Barbados 87 78 sh 87 78 s Cairo 94 71 s 94 72 s St. Petersburg 85 68 t 86 58 t
San Houston Tampa Showers Havana 88 76 r 89 75 r Jerusalem 77 59 s 77 56 sh Stockholm 70 52 sh 66 50 sh
Antonio Kingston 88 80 t 87 80 r Johannesburg 71 40 s 75 37 s Vienna 74 62 sh 76 61 t
40s Port-au-Prince 88 77 sh 91 78 t Riyadh 102 77 s 101 73 s Warsaw 73 56 c 77 53 pc
50s Miami Rain
San Juan 90 77 sh 88 77 sh Tehran 92 71 s 94 76 s Zurich 78 56 sh 78 53 t
70s Monterrey
T-storms
60s Anchorage Weather Delays U.S. Weather Delay International Weather Delay
Cabo San Lucas
Snow Weather and forecast Atlanta t PM Hong Kong t AD
weather-related delays at Chicago s NO London pc none
Flurries major airline hubs. Check Dallas/Ft. Worth t PM Paris s none
Honolulu most updated schedule Denver t AD Singapore sh PM
Mexico City with airlines. Legend: All- Mpls./St. Paul t AD Sydney c none
Ice day delays possible (AD);
New York s NO Tokyo pc none
U.S. Forecasts Today Tomorrow Today Tomorrow Today Tomorrow
Morning delays (AM);
Evening delays (PM) San Francisco pc AD Vancouver pc none
High-low forecasts and general City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W City Hi Lo W Hi Lo W
weather conditions. s...sunny;pc... Buffalo 78 56 s 78 62 t Little Rock 96 76 t 98 76 pc Pittsburgh 83 61 s 86 65 pc
partly cloudy; c...cloudy; sh...show- Burlington 76 57 s 68 57 c Los Angeles 77 52 pc 77 62 pc Portland, ME 78 55 s 73 58 t
Events Forecast
ers; t...thunderstorms; r...rain; VIVA ELVIS & LEGENDS OF ROCK & ROLL RACE TO THE TASTE
Charlotte 94 73 t 92 70 t Memphis 94 76 t 96 78 t Portland, OR 70 53 pc 74 56 pc
sf...snow flurries; sn...snow; i...ice
Chicago 86 69 s 91 72 t Miami 90 81 t 90 79 t Sacramento 90 58 s 95 61 s Richmond, Va. Chicago
Today Tomorrow Cincinnati 88 66 s 95 71 s Milwaukee 84 67 pc 83 70 t St. Louis 90 76 s 97 79 s A whole lotta shakin’ going on at Virginia Beach Work up an appetite to the finish line
City Hi Lo W Hi Lo W Cleveland 82 63 s 89 72 t Mpls./St. Paul 86 69 t 88 71 t Salt Lake City 90 59 pc 87 58 s boardwalk Sunday
Albany 82 57 s 77 63 t Dallas 98 78 t 97 78 s Nashville 92 69 t 97 76 s San Diego 67 61 pc 68 63 pc Saturday Sunday Saturday Sunday
Albuquerque 89 66 t 95 65 t Denver 95 65 t 95 56 t New Orleans 94 78 t 94 78 pc San Francisco 68 52 pc 73 56 pc
Hi/Lo: 97/74 Hi/Lo: 99/77 Hi/Lo: 91/72 Hi/Lo: 91/68
Anchorage 66 54 sh 63 56 pc Detroit 84 67 s 86 70 t New York 87 71 s 86 74 s San Jose 77 56 s 81 60 s
Atlanta 94 74 t 92 74 t Honolulu 87 74 s 88 74 s Oklahoma City 98 74 s 97 76 pc Santa Fe 86 56 t 94 55 t
Austin 92 72 pc 96 73 s Houston 94 76 t 95 77 s Omaha 94 76 s 97 73 t Seattle 67 52 pc 69 55 pc
Baltimore 90 67 pc 93 70 pc Indianapolis 88 67 s 94 74 s Orlando 94 76 pc 94 77 t Sioux Falls 86 69 s 90 65 t
Boise 81 54 pc 82 54 s Kansas City 96 77 s 95 75 s Philadelphia 89 68 s 94 73 pc Tucson 104 73 s 104 70 s
Boston 80 62 s 76 64 t Las Vegas 103 77 s 103 78 s Phoenix 109 79 pc 107 79 s Wash., DC 90 72 pc 93 75 pc

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