H&M has revealed that it will unveil its new fascia Arket in London this autumn against a backdrop of falling profits.

The retailer, which will be set at a higher price point than H&M, will sell women’s, men’s and children’s clothing and will have in-store cafés selling Nordic cuisine.

The launch comes as the group reported weaker than expected sales growth, with first-quarter sales up 4% against a full-year target of 10-15%.

Meanwhile operating profit fell 3% to SKr3.16bn (£281m) but was ahead of analysts’ expectations.

H&M attributed the poor performance to tough market conditions in the US and central and Eastern Europe.

Group boss Karl-Johan Persson said: “To meet the rapid change that is going on in fashion retail we need to be even faster and more flexible in our work processes, for example as regards buying and allocation of our assortment.

“We are therefore investing significantly in our supply chain, such as in new logistics solutions with greater levels of automation, but also in optimising our lead times. In the changes we are making, advanced analytics will provide important support for decision making.”

’Simple, timeless and functional’

H&M will open its first Arket store in London and launch online in 18 European markets later in the year. Stores in Brussels, Copenhagen and Munich will follow.

Persson said Arket’s aesthetic was “simple, timeless and functional” with a focus on materials and fit.

The new fascia joins a host of other H&M brands including & Other Stories, Cheap Monday, Cos, Monki and Weekday. It is H&M’s first global launch since & Other Stories in 2014.

The group’s first UK Weekday store will open on Regent Street this summer.