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Hitt og þetta 19. apríl 2006

DJ THE SKEPTIC: H&Ms Slip Is Showing

LONDON (Dow Jones)--A late start to spring and the timing of Easter conspired to dent sales progress at Hennes & Mauritz.

The big Swedish retailer said March sales were flat on year, and down a greater-than-expected 8% on a like-for-like basis for stores open longer than a year.

On their own, H&M's numbers aren't overly worrisome. Indeed, they reflect a trend among the trendy: U.S. rival Gap recorded a 13% drop in March same-store sales, with international store sales down 16%.

A warm April could yet pull things back on track for H&M, preventing the need for markdowns on its current fashion line.

A weak April, though, and the Swedish company will look decidedly frumpy, especially after having already turned in a poor sales performance for February and carrying significantly higher stock levels into the second quarter.

If so, then H&M's forecast of no further deterioration in its gross margin will be under threat. And that will only further increase the gap between H&M and its nearest peer, Inditex.