Primark’s sales are soaring and the retailer has a slew of store openings planned for the year.
Contrary to what’s happening in much of the market save for online and off-price, Primark is not only seeing sales success, but planning the biggest expansion it’s seen in a decade.
In its interim results report released Wednesday, Primark parent company Associated British Foods (ABF) said results were better than expected, and that 29 stores are slated to open this year across Europe and in the U.S.
The expansion already follows the addition of 16 new stores and 800,000 square feet of selling space across eight countries last year. This year so far, Primark has added a further 300,000 square feet of selling space, and the company expects that expansion to have reached 1.5 million square feet by year-end.
“Primark delivered a substantial increase in selling space which, together with its strong consumer offering, contributed to a further increase in our share of the total clothing market,” ABF chief executive George Weston said.
Sales at Primark were up 11 percent to $3.2 billion in 24 weeks ended March 4, driven largely by that increased selling space. Sales in the U.K. were up 7 percent over last year. Revenue at the company jumped 12 percent on a comparable basis. Turning to the U.S., ABF said, “The impact of the U.S. dollar’s strength on Primark’s input costs have been well flagged and our commitment to price leadership in clothing retail has seen, as forecast, a decline in operating margin.” The full effect of the pound sterling’s weakness against the dollar—which increases the costs of clothing made in Asia and priced in U.S. dollars—will likely be realized in the second half of the year, when ABF expects to see an even greater margin decline for Primark.
For now, the British budget clothier is focused on stores despite the increasingly digital age upon us.
“There’s a very viable strategy without trading online,” Weston told Bloomberg. “The best value is to be found on the high street, not online.”