Primark plans to triple German ops, foresees local double digit sales hitting €750m
Primark is targeting a major push into Germany that could see the value fashion retailer triple its presence in Europe’s biggest economy. That equates to adding seven more stores to the current 22 within two years.
Jason Bason, CFO at the parent Associated British Foods, said the expansion would make the country Primark’s third biggest market by selling space, behind the UK and Spain.
“You don’t need to get anything close to the UK sales density to see that our German business could be much bigger,” Bason told Reuters, adding: “It could be three times the size of the business we’ve got now.”
He noted Primark has only 1.4m sq ft of retail space for a German population of 80m, compared to 6.5m sq ft for a UK population of 65m.
Although Primark’s comp sales fell in Germany in the 16 weeks to January 7, hurt by a rapid increase in selling space, Bason is predicting that sales will grow at a high single digit rate in an otherwise flat market, to reach about €750m this year.
“The like-for-like negatives are a reflection of the immaturity of our business in Germany,” he said. “Adding space is the right economic thing to do.”
Bason said the only thing holding Primark back in Germany was finding large enough stores in the right locations, although he noted it was easier than in Italy and Spain.
Bason also said he had been surprised at the high sales density in Germany and the fact that people would travel as far as 100km, even from across the Polish border, to come to a store.
“The German consumer loves value. Our price point is the real attraction,” he said, adding that Germans also appreciate the breadth of the range on offer and modern store environment.