By  on July 15, 2009

PARIS — Swedish fashion retailer Hennes & Mauritz on Wednesday reported a worse-than-expected drop in June same-store sales, suggesting that markets remain tough despite some early signs of recovery from the economic downturn.

H&M, the world’s third largest fashion chain behind Gap Inc. and Spain’s Inditex Group, said comparable sales dropped 5 percent last month. Total sales, which include contributions from new stores, rose 4 percent in the same period. At the end of June, H&M operated 1,827 stores, compared with 1,600 a year ago.

H&M doesn’t provide actual figures for its monthly sales updates and releases only percentage changes.

Like its fast-fashion competitor Inditex, H&M has managed to weather the economic downturn better than midmarket fashion retailers because of its low-cost strategy and growth into new markets.

Last month, H&M reported a better-than-expected 6.4 percent increase in second-quarter net profits, helped by store openings and successful spring collections, especially in countries where the company recently expanded.

But the Swedish giant also reported flat sales in May, while sales in stores that have been open longer than a year declined 9 percent in the same month.

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