The world's second-biggest fashion retailer recorded a pretext deficit $695 million (around R11 billion) against a profit of around that much this time last year.

H&M says it had to increase price cuts, putting a squeeze on margins. The Swedish firm also offered a bleak outlook for the coming period, it expects a high level of discounting over the next three months.  

Chief executive Helena Helmersson says consumer demand remains weak with the whole industry also plagued by an over-supply of stock.

READ MORE: Sell, stow or dump? Clothing stores wrestle with mountains of stock amid coronavirus pandemic

Now H&M will speed up store closures and open fewer new ones, resulting in a net reduction of outlets. Around 7 percent of its stores remain temporarily shut, against 80 percent at the height of the crisis. 

It says trading in China is still lower than year-ago levels. H&M shares sank three percent in early trade Friday, 26 June 2020. 

Compiled by Phelokazi Mbude

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