Primark makes good progress
Primark owner Associated British Foods has said half year sales at the fashion retailer are expected to be 7.5% ahead of last year at constant currency, driven by increased retail selling space.
At actual exchange rates sales are expected to be 4% ahead.
The group said trading at Primark was weaker in the weeks leading up to and over Christmas as a result of unseasonably warm weather across northern Europe. Since then, cumulative like-for-like sales have improved and are expected to be level with last year in the first half.
Trading in France has remained “buoyant” with strong like-for-like sales in the period despite the very high sales densities achieved by the stores in their first year of trading.
ABF said early trading at Primark’s two new stores in the US has been encouraging with the range and concept well received. It is planning to open a further six stores in the US later this calendar year and a 70,000 square foot store in the American Dream shopping mall in New Jersey in 2017.
Operating profit margin in the period has been better than expected, with much of the impact of the stronger dollar being mitigated by a good buying performance and a lower level of markdowns.
ABF said it is making a significant investment in Primark’s warehouse infrastructure. Last year, capacity was added in Spain and Germany and new warehouse was opened in Bor on the western border of the Czech Republic.
This summer Primark will migrate its Magna Park distribution centre to a larger, purpose built warehouse at Islip, Northamptonshire. In addition, it will open a new facility in Roosendaal in the Netherlands will later in the year.