H&M profits hit by strengthening dollar

Swedish fashion giant H&M has suffered a drop in its annual net profits, thanks to higher purchasing costs from the rising dollar and discounts.

The group's profits after tax were £1.7bn (18.636bn kronor) in the year ending 30 November 2016.

Sales were lower than expected, partly because people held off from buying new clothes in Spring thanks to colder weather, prompting discounts.

However, in the last three months net profits rose by 7% and sales increased.

The fashion chain continues to expand its global reach.

Karl-Johan Persson, H&M chief executive, said: "During the year, we opened 427 new stores net worldwide and added three new markets, and we also rolled out our online store to 11 additional markets."

Mr Persson said the company was continuing to develop a strong online presence and was planning stores in Kazakhstan, Colombia, Iceland, Vietnam and Georgia.

But he also made reference to "geopolitical events" which he said had had a negative impact on the retail trade, particularly in France, Germany, Switzerland and Italy as well as the US and China.

"Since these markets represent a large share of our sales, this consequently had a great impact on our overall sales development." Mr Persson said.