H&M is to launch a new fascia premium next year.

The retail giant’s chief executive Karl-Johan Persson said the chain would build on the launch of Cos, its upmarket fashion store.

He said: “Like Cos, which today is very successful with good profitability, the new chain of stores will be independent and complement the other offerings from the group,” Persson said.

H&M remained tight-lipped about its plans for the stores and it was unclear whether it would launch in the UK/

The group reported a 13% sales rise to 27.8bn Swedish kronor (£2.6bn) in the three months to 29 February, however its margins were squeezed as it absorbed the rising cost of cotton and put on more special offers.

H&M saw particularly strong sales growth of 21% in the UK and said the it will be one of its fastest growing markets this year.