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H&M blames higher cotton prices for profits fall S

TOCKHOLM: Swedish fashion retailer Hennes & Mauritz has said its pro fits fell by 30 per cent in the fi rst quarter of the year. The company blamed higher cotton prices a nd the "negative effect" of the stro ng Swedish krona , according to the British Broadcasting Corporat ion on Thursday. During December to February, H&M said profi ts dropped to 2.62bn kronor ($41 7m; £259m), from 3.54bn kro nor in the same period a year ago. In early Stockholm trading, shares in H&M dropped four per cent

fo llowing the updale. "H&M is taking a very large ga mble to readjust its pricing and commercial propositio n a t a very d iffi cult time for the industry. " The budge t fashion firm also reported broadly flat sales at 24 .5bn krona. It was the third quarter in a row that the company had fa llen short of its profit and sales forecasts. A stro ng ._curre ncy hampers internatio nal producers as it makes their goods more expensive to buy abroad and can lead to a reduction in demand. H&M was a lso hit by

higher cotton prices and

sales said it was aiming to


increase its market share.


costs . The price of cotton has risen more than 140 per cent over the past six mo nths, while the price of crude o il is more than 30 per cent higher tha n it was 12 months ago. The world's

"Instead of passing on these costs increases to custo mers,




strengthen our price position in order to build further on our stro ng market position for the long-term , said chief executive Karl-Johan Persson.

on the company's strategy. "H&M is taking a very large gamble to re-adjust its pricing and commercial proposition at a very difficult time for the industry, ' §~;d Simon Irwin fro m Uberum Capital. "The near-term pain from this is clear in results, however there little

in terms o f dri ving custom er




sales." However, Soren Lontoft Ha nsen from Sydbank believed the strategy was the r ight one . "They should be able to take market share in

UK's nationalis ed 'bad' banks post 2010 profit ONDON: The stateowned company, which ma nages the nationa lised Bradford and , Bingley a nd Nor thern RocH's 'bad ba nk' said bo th conipanies made a profit last ye~r. Nationalised in 2008. Bradford and Bingley's branches were then transferred to Abbey. according Sky News on Thursday. According 10 United Kingdom Asset Resolution. and Bingley, Bradford which was bought out by the Govern ment in 2008, made £200m and saw mortgage arrears fa ll by 32 per cent. Northern Rock Asset Management. which was spun off from Northern Rock pic, made £277m altho ugh arrears rose slightly. This compares with a £3 13.4m 60llectively both owe the companies Government £48.7bn , and only Nor thern Rock made payments of £ 1.1 bn on its share , £21. 7bn. The chief executi ve of UK Asset Resolution. Ridiard Ba nks, said the curren t level of interest rates means


most homeowners are able

to meet their mortgage repayments. He added: "However, the uncertain economic environment,


in taxes, infla tion a nd will unemployment inevitably. impact o ur custo mers and fi na ncial results. " No t bad for a oouple of bad banks. The problem here tho ugh is negati ve equi ty. Both _ba nks have problems with negative equity - 27 per cent of Bradford & Bingley's mo rtgages. and 17 per cent of NRAM's, are wor th more than the property. ',__,'. In 2010, 44,000 of the two ba nks' customers had their loans restructured

because they couldn' t meet the pay ments. The Government split Northern Rock in two at the start of last year, forming a mortgage and savings bank called Northern Rock Pic and Northern Rock Asset Management to house the m ore toxic loans.

Northe rn Rock pic said it re ma ined in the red earlier this month , reporting a £232.4m pre-tax loss fo r 2010.

• US Deputy Secretary of State, Mr. Richard Armitage; and Taiwanese President, Ma Ying-jeou, during a m eeting in Taipei on Tuesday. Photo: AFP

BAA ordered to sell off two airports ONDON : Airports operator BAA has been told it must proceed with the sell-off of Stansted - as well as either Glasgow or Edi nburgh airports - by the


in 2009. At the time, it said BAA had shown "a lack of responsiveness to the interests of airli nes and passengers that we would

commission's chairman Peter Freeman said: "We remain convinced that the original decision to require BAA to divest three airports is the right one for passengers and

Competition Commission .

not expect

airli nes, "

Accordi ng to S ky News on Thu rsday, BAA sold Gatwick in 2009. but now faces the sell-off of two more of its major a irports It follows a series of legal challenges to the commission's original ruling

business competing in a well-functioning market. " It also found joint ownership of Scotland 's two main airports "adversely affects competition between Edinburgh and Glasgow." Two years later, the






BAA was told to sell Gatwick Airport in West Sussex in 2009, but it had already begun the process of selling it to Global Infrastructure Partners, the owner of Londo n City Airport, for £ 1.5bn .

It is now required to prioritise the sale of Stansted Ai rport because it has the most passengers who will benefi t fro m increased competition.

published in March 2009." BAA and other interested parties have until the sum mer to respo nd to the provisional ruli ng before the

In a statement, BAA said :

makes its final verdict in May

"We will carefully consider the CC's provisional decisio n before making any decisions or furth er statements." "We believe that there has been a material change in circumstances since the commission's report was

Ivory Coast: San Pedro cocoa port seized by Ouattara


BIDJAN Forces loyal to one of Ivo ry Coast's rival preside nts, Alassane Ouattara, have captured the key cocoa-exporting port of San Pedro, residents have said. The fighte rs began their adva nce from the north agai nst incumbent leader Laurent Gbagbo on Monday. A British Broadcasting Corporation reporter says Gbagbo's army now only controls about a quarter of the West African nation, accordi ng to a BBC re port on Thursday. The UN , which recogn ises Ouattara as winner of November's poll " has voted



They add to economic measure; already tpken by the EU and African groups.

The UN resolubon, drafted by Fra nce and NlgeTla, imposes a travel ban and assets freeze on Mr. Gbagbo, his wife Simone and three of his closest associates. One million people have ned the violence - mostly from the main city Abidjan in the south - and at least 473 people have been killed since December, accord ing to the UN . Human Rights Watch says it has evidence foreigners are being targeted by proGbagbo forces because they are seen as being sympathe tic to Mr Ouattara, The US-based rights group has documented the massacre of atleast3 7 foreign

There are approxImately five mllhon expatTlate workers in Ivory Coast from neighbouring countries, who come to work on cocoa farms and tropical fruit pla ntations. All state institutions still in the former capital Abidjan. But it is still a highly symbolic victory; this is the hometown of Ivory Coast's first President. Felix Houphouet-Boigny. It is also home to some significant proGbagbo forces, who seem to have put up little resistance to the arrival of pro-Ouattara troops. The way is now open for forces to Abidjan, less than three hours away along Ihe country's onlymajor highway.

after forces loyal to Ouattara passed thro ugh on their advance south .

Yamoussoukro should be joined by colleagues coming through from the west,



or June .

A BAA source told Sky News its legal team is reviewing the findings and will consider whether another appeal will be mounted within the next few days. Management at the a irport operator believe the refusal to allow new run way development at either Heathrow or Stansted airports restricts the potential

whIle the eastern flank may also reach northern Ab,djan around the same tIme ' If President Gbagbo decides to stay on and fight, the battle for Abidjan is likely for competition and to be fierce. But before the warrants a full review of the main body of pro-Ouattara commission's decision. forces arrive, the city is Separately, BAA's already increasingly insecure Heathrow has fi nished in and Gbagbo's hold' on power 99th place in a global league al ready looks shaky. table of airports, according The south-western port to The Times, ranking below of San Pedro has been a Calcutta , Moscow and key objective for Ouattara J ohannesburg. because it would allow hi m The world's biggest to export cocoa and lumber, airport. which handles 66 and will allow his supporters million passengers a year, to resupply by sea . has also been criticised Residents told the BBC for a fourfold increase in there was sporadic shooting average delays from three overnight after pro-Ouattara to 12 minutes over the past forces marched into the decade. But Heathrow performed better than Madrid , Frankfurt Wednesday. and Paris Charles de Gaulle con:;;'~~~:i~~~t~;~:t:~dn~h: a irports in the Airports Council International data. town centre.

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THE PUNCH, 01 APRIL, 2011  

Ivory Coast: San Pedro cocoa port seized by Ouattara