Primark appeal means Christmas joy as expansion continues apace
There was no denting Primark’s appeal over the wider Holiday period. Demand for the UK-based value fashion retailer’s offer and growing store count at home and abroad ensured currency neutral sales for the 16 weeks to January 7 rose 11% year-on-year with sales up 22% at actual exchange rates. Same-store sales were also 12% ahead.
The core UK business “performed well” with comp sales “good” as market share increased “reflecting the strength of our consumer offering”.
Sales, however, were actually held back by declines, “albeit smaller than last year”, in Germany and the Netherlands, the latter particularly affected by the “rapid increase in selling space”, it said.
“New stores opened in the period traded strongly and our business in the US continued to develop,” it noted.
However, it also noted: “As forecast, the operating profit margin will decline as the year progresses reflecting the strength of the US dollar on input costs. Foreign exchange contracts are now in place for most of the remaining purchases for this financial year.”
As of January, the retailer operated 328 stores from 13.1 million sq ft. Fifteen new stores were opened in the period. In the UK they included relocations to bigger units in Reading and Sheffield and new stores in Carlisle, Stafford, Truro and York. Abroad, new stores included Liffey Valley,Ireland; Mallorca, Spain; Mannheim and Hamburg in Germany; Lille and Paris, Evry in France; a second store in Italy in Brescia; a flagship in the centre of Amsterdam; and its sixth store in the US in Burlington, Massachusetts.
Primark said it still expects to open 1.3m sq ft in the current financial year.