H&M saw shares hit a ten-year low as it admitted it has £3billion of unsold stock.
The fashion retailer posted a drop in profits to £112million for the three months to February 28, down from £275million a year earlier.
Group sales fell 2 per cent after it admitted the recent cold weather had hit demand for spring lines, although it has also been knocked by widespread discounting in a bid to sell stock.
H&M posted a drop in profits to £112m for the three months to February 28, down from £275m a year earlier
In the UK, where it has 286 stores, sales fell 1 per cent.
H&M – the world’s second-biggest clothes group after Inditex – admitted it had built up a record pile of unsold garments, equivalent to 17.6 per cent of sales, or £3billion.
Chief executive Karl-Johan Persson said that it had been a ‘tough start to the year’.
H&M has seen its shares tumble over the past three years, and last night they closed down 5.4 per cent, or 6.86p, at 120.33p.