Swedish clothing giant H&M is to enter Russia next year after posting better-than-expected sales in its fourth quarter.

H&M will make its debut with the opening of a standalone store and analysts are upbeat about its prospects in the country’s burgeoning retail economy. Bernstein senior analyst Luca Solca said: “Russia has a significant appetite for fashion, judging by the high-end fashion brand performance. H&M is successful at bringing fashion trends to the masses. Inditex has been successful in Russia and H&M will have similar success.”

Deutsche Bank said: “Apart from excellent market conditions, we also think the competitive situation looks favourable. Competition in the mid-market segment seems limited, especially because there are few successful local competitors.”

H&M posted sales up 16.9 per cent to Skr22.8 billion (£1.82 billion) for the three months to November 30. Like-for-likes increased 4.1 per cent. Pre-tax profits jumped 14.4 per cent to Skr6.2 billion (495.8 million).

Solca said: “Top-line growth is set to continue. H&M has said it will have 10 to 15 per cent new space a year, which is massive. The issue is whether it will have positive like-for-like growth in the current year, the market has been quite negative. Top-line growth has been helped by online sites in Germany and Austria.”