Primark to press ahead with expansion plans
Primark owner Associated British Foods has reported that sales at the fashion retailer rose by 7% at constant currency in the 40 weeks to 18 June driven by increased selling space.
However, like-for-like sales in the last 16 weeks were adversely affected by “unpredictable weather patterns”, with an especially cold April followed by a return to more seasonal weather in May.
Primark’s retail selling space has increased by 0.8 million square feet since the beginning of the financial year and at 18 June there were 310 stores trading from 12 million square feet of retail selling space.
During its third quarter Primark opened 11 new stores in the UK, France, Portugal, Italy, Germany, the Netherlands and the US. It said the relocation of its UK warehouse capacity from Magna Park to Islip in Northamptonshire is expected to be completed by September.
Commenting on the EU referendum in the UK, ABF added: “The UK referendum decision to leave the EU has created uncertainty in the business environment and financial markets.
“Sterling has weakened significantly since the referendum vote. In our next financial year, these rates would have both positive and negative effects on profit.”
The company said there would be an adverse transactional effect on the profit margin on Primark’s UK sales, which currently account for half of its turnover. However, its plans for Primark’s expansion remain unchanged.
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