Swedish clothing giant Hennes and Mauritz (H&M) Thursday announced the launch of its eighth fashion brand as tough market conditions in the US and Central Europe hurt profits.

H&M's pretax profit fell to 3.2 billion kronor (335 million euros, $360 million) in the December to February period, the first quarter of the company's financial year, from 3.3 billion kronor the previous year, it said.

Sales in the period from December to February, excluding value-added tax (VAT), rose 8 per cent year on year to 46.98 billion kronor.

"For fashion retail in general, market conditions were very tough in many of our large markets in central and southern Europe and in the US, and this was reflected in our sales," CEO Karl-Johan Persson said in a statement.

The new brand, ARKET, will be launched after the summer with the first store to open in London followed by Brussels, Copenhagen and Munich and online operations in 18 European markets in early autumn, the group said.

It offers clothes for men, women and children and household products, which will be more expensive than H&M.

Each store will also include a coffee shop inspired by the Nordic kitchen and cuisine.

"The overall direction and focus is quality in simple, timeless and functional designs," Persson said.

"There will be products in a broad price range, however in a slightly higher price segment than H&M with emphasis on materials, function and fit," he added.

The group also operates Swedish brands such as Cos, Other Stories, Monki, Weekday and Cheap Monday, whose sales continue to grow both online and in stores.

H&M planned to open 430 stores this year, including its first stores in Colombia, Iceland, Vietnam and Georgia. In mid-March it opened its first store in Kazakhstan.