Like-for-likes at Primark up 6%
Continental performance and UK growth drive sales for the fashion retailer
Sales and profit at Primark will again be well ahead of last year. Like-for-like sales growth of 6% is expected for the full year driven by a very strong performance in continental Europe and continued good growth in the UK.
The company said that ‘Sterling’s relative strength against the US dollar in the first half benefited the cost of goods sourced in dollars and sold in the second half, easing the pressure on gross margins experienced earlier in the year. Economies of scale, as revenues increase, have also contributed to an improvement in operating margins in the second half and margins for the full year will be higher than last year. Higher cotton prices and freight costs and the increase in VAT, implemented in Spain in July and planned for the UK in January, will put pressure on margins next year’.
‘We expect to have opened eight new stores in the second half of the year, three in Spain, and five in the UK. We relocated our stores in Braehead, Scotland and Waterford, Ireland into new, larger premises and extended a number of existing stores. This will bring the total number of stores to 204 by the year end. We will be trading from 6.5 million sq ft of selling space which is an increase of 10% since last year end. In August Primark entered into a conditional contract to lease a second store on London’s Oxford Street, occupation of which is expected by June next year with opening planned before Christmas 2011’.
The new 220,000 sq ft freehold warehouse in Naas in Ireland is now operational and the former leased premises will be vacated at the end of 2010. The 200,000 sq ft leasehold warehouse at Torija in Spain is also now operational, providing regional distribution capability for southern continental Europe.
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