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H&M Looks Smart

Swedish fashion retailer Hennes & Mauritz posted a healthy first-quarter profit, but it’s the company’s second-quarter results that may be very interesting and --the company hopes -- rewarding.

In March, H&M opened its first Collections of Style store, a new chain that will sell clothes at a higher price range. The first store is located on the fashionable and upscale Regent Street in Central London. Stores are scheduled to open soon in Germany, Belgium and the Netherlands.

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March also brought the well-publicized launch of a collection co-designed by pop star Madonna, a move the company hopes will further boost sales during the second quarter. The M By Madonna collection hit stores March 22. Initial reaction was disappointing.

The Swedish retailer, a leader affordable fashion -- was one of the first to combine celebrity collections with budget prices. Their much-anticipated clothing line, "M by Madonna" went on sale March 22nd. It is the second collection by Madonna for H&M. The 30-piece line was co-designed by Madonna and the Swedish retailer’s Director of Design, Margereta Van den Bosh, and includes a white trench coat, printed blouses and sequined shift dresses. Prices range from $30 to $580. In many locations, the clothes went flying off the racks in less than an hour. H&M said the "M by Madonna" collection reflects Madonna’s "timeless, unique and always glamorous style."

Madonna is not the only celebrity to promote H&M clothes. Australian pop singer Kylie Minogue -- a tad closer in age to the company’s core customer -- was recently hired to model swimwear.

H&M has also called upon some of fashion’s biggest names to design collections with hot selling lines by Stella McCartney, Karl Lagerfeld and cult label Viktor Rolf.

H&M has been expanding rapidly and the company plans to continue do so. In the second quarter alone, 75 new stores are slated for opening – a good number of them in the U.S. The company’s first store in Hong Kong opened earlier this month and sales have reportedly exceeded expectations. H&M has more than 1,300 stores in 28 countries, Indeed, the company said expansion helped boost sales in the first quarter as net profit rose 27%.