H&M profits falls on higher costs

Fashion retailer Hennes & Mauritz (H&M) has blamed higher costs and investment in a new brand for its falling profits.

It reported net profits for the three months to the end of November of 5.29bn kronor ($832m; £528m), down from 5.36bn kronor in the same quarter last year.

It will open stores bearing its new brand & Other Stories in the UK, Spain, Germany, Denmark, Italy, France and Sweden in the first half of the year.

H&M opened 304 new stores in 2012 and plans to open 325 more this year.

Net profit for the full year came in at 16.87bn kronor, which was up 7% on the same period last year.

"Our long-term investments relate to a number of areas such as online shopping, IT, a completely new brand & Other Stories and future broadening of the product range," said chief executive Karl-Johan Persson.

"These long-term investments have created cost increases and to a great extent have not yet generated any revenue."

The fourth quarter results were slightly worse than had been expected and H&M shares fell 2% in early trading.