Third quarter profit at value fashion retailer KappAhl has nearly halved, the Swedish company said today (24 June), and warned that the weak economy is likely to "last some time."

For the three months from March to May, net profit tumbled 44.6% to SEK62m (US$8m) from SEK112m in the same period last year.

Net sales rose 5.8% to SEK1,206m, up from SEK 1,140m, but discounting and promotions means gross margin fell to 60.4% from 63.8%.

"Despite the clear drop in the market we increased sales and are strengthening our position," said CEO Christian W Jansson.

"We also still have a good operating margin in a market where the number of offers and clearance sales has markedly increased."

Jansson noted that KappAhl's business concept "allows us to cope better than average since our offer gives a lot of fashion for the money."

The company, which operates more than 300 stores in Sweden, Norway, Finland and Poland, is planning to open its first store in Czech Republic this autumn.