Problems rolling out a logistics system cost H&M $44.28m and caused sales to drop in the third quarter of this year.

In its third quarter report, the firm said “intensive work” fixing the problem led to the extra outlay, while the problem caused a sales drop of 8 percent in affected markets.

The new system is part of H&M’s work to increase the speed of its supply chain, and was introduced in the U.S., France, Italy and Belgium over the spring. The firm said the problem has “largely” been resolved.

Sales in all other markets increased by 8 percent during the quarter, and overall the firm saw net sales for the quarter increase 9 percent on the previous year to $6.25bn.

H&M started increasing investment in its supply chain in the first half of 2017 after a fall in its profits saw it drop behind its main rival Zara, owned by Inditex, which is ranked second globally by Gartner for its supply chain.

Commenting on its most recent results, Karl-Johan Persson, H&M CEO, said: “Store sales were negatively impacted by the problems that arose when we introduced new logistics systems in these markets. Intensive work to correct the problems — which have now largely been resolved — resulted in extraordinary costs of around SEK400m in the quarter.

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