H&M, the Swedish fashion giant, has declared that its stores here will be profitable by the end of this year. The group has also disclosed an €8 million investment to expand in the Irish market.

The chain, which has opened five stores since entering the market last year, plans to develop further outlets though it will not say how many are planned or where they will be sited.

H&M is alone among international retailers operating in Ireland in that it publishes quarterly sales figures. But it was only with the filing this month of maiden accounts that the chain disclosed its profit performance and projection for the business.

The accounts - for a company called H&M Hennes & Mauritz (Ireland) - show that the chain's shops had sales of €12.36 million in period from the opening of its first store at the Dundrum Town Centre in March 2005 to the end of November last. The turnover figure was net of value added tax.

The chain followed that initial opening in Ireland with new stores at the Liffey Valley centre and Mary Street in Dublin and in Limerick, all of which opened last autumn.

A store at the the Whitewater Centre in Newbridge, Co Kildare, opened earlier this year.

The chain had gross profits of €7.62 million in first 10 months here. But with net operating expenses of €8.91 million reflected the cost of setting up the stores, it recorded an overall operating loss of €1.28 million. The pretax loss was €1.37 million.

The quarterly financial reports of the Irish operation's parent company in the periods since then show that the business is growing rapidly.

The most recent filing, for example, shows that turnover rose to €9.1 million in the three months to May from €7.7 million in the previous three-month period.

In notes on the accounts for the Irish unit, the directors of the business said the results for the period were in line with their expectations.

"At November 30th 2005, the company was in a net liabilities position. A loan of €8 million was received from the parent company to finance the purchase of fixed assets. It is management's expectation that the Irish operation will become profitable by the end of 2006," the report said.

"The directors also aim to continue the expansion of new stores, which together with increased sales in existing stores will contribute to continued growth in turnover."

A London-based H&M spokeswoman declined to say how many openings were planned. "We do plan to open more stores, but when and where, I can't say."

The directors said in their report that changes in the regulatory environment could adversely affect the business, but did not specify the nature of the decisions that might constitute a risk to it.

They said continuing rapid changes in fashion could increase competition or require substantial additional investments.

H&M employed 79 staff in Ireland at the end of the accounting period. It paid out €1.55 million in wages and social welfare costs.