Value fashion giant Primark’s full-year sales are expected to surge 17% and like-for-likes 4.5% as it plots further expansion in the US.
Primark, which will open its first US store in Boston in late 2015, said negotiations are underway to secure further stores in the north east of the country. It intends to trade up to ten stores by late 2016. It plans to lease a warehouse in the region to support its US store roll-out.
Primark owner Associated British Foods said the value fashion retailer’s sales for its year to September 13, which will rise 16% in actual exchange rates, was driven by an increase in selling space and superior sales densities in new stores.
During the year, Primark opened 1.4 million sq ft of selling space in 28 new stores, the most recent being on Alexanderplatz in Berlin, Bath in the UK and Enschede in the Netherlands. It now trades from 278 stores and 10.2 million sq ft.
Primark’s like-for-like sales growth was driven by its buying team getting its ranges right along with the boost the warm spring and summer gave the retailer.
The retailer achieved an operating profit margin of 13.1% in the first half, an improvement on last year, benefitting from warehouse and distribution efficiencies and lower freight rates.
It expects operating margin to be “slightly higher” in its second half due to “strong trading” during the summer and a lower level of markdown.
It said it has a “very strong pipeline” of new stores in Europe and expects to add just less than 1 million sq ft of space in its next financial year, followed by a “strong programme of openings in autumn 2015.
Primark also had “outstanding results” in Spain. To meet the increasing scale of its continental Europe business, the value fashion retailer has doubled the size of its warehouse in Torija, Spain and is extending its distribution centre in Mönchengladbach, Germany by 60%, which will be operational early next year.