Top fashion chain Hennes & Mauritz has revealed a 12% jump in second-quarter profit and announced plans to launch a new chain in a higher price bracket.

Second-quarter income was SEK2.65bn (US$363m) as sales grew 10% from SEK2.36bn a year ago.

For the first half of the year, pre-tax profit grew 11% to SEK6.60m with after-tax group profit of SEK4.46m. May sales grew 13%, the company said.

German and Austrian sales have been weak recently, the company admitted, but said it had seen good results throughout Nordic countries and several Southern European countries.

H&M said it would launch a new store chain under a new brand for men and women next year, with ten stores planned initially.

Like its existing offering, the new chain will aim to offer fashion and quality, but in a higher price segment, explained head of investor relations Nils Vinge.

Vinge stressed the company will not release any more details on the new venture until autumn but promised it would be a "niche assortment".

In addition, the business will increase its shoe assortment for women in about 200 of its stores next spring, and is also preparing to step onto the Chinese market with two full-line stores in Shanghai and Hong Kong. "We will gradually develop our infrastructure and store network there", Vinge told investors.

The company plans a net increase of 100 stores in the second half with an emphasis on the US, Spanish, French, German, Canadian and UK markets. Establishment is going according to plan in the Middle East, Greece and Slovakia, it added.

H&M plans to operate stores in 24 countries by the end of the year.