Value fashion giant Primark has continued to perform well over 2010 driven by a “very stong” performance in continental Europe.

It expects full year like-for-like sales to be up by 6%, driven by strong sales in Europe and “continued good growth in the UK”.

In its pre-close statement for parent company Associated British Foods, the high street retailer said that economies of scale has contributed to improved operating margins in the second half, and that margins for the full year would be higher than last year.

But it warned that rising cotton and freight prices and the looming increase in VAT would be squeeze margins next year.

The chain expects to open eight new stores in the second half of the year, three in Spain and five in the UK, bringing its total number of stores to 204 by the end of this year. 

It has also relocated its stores in Braehead in Scotland and Waterford in Ireland to bigger premises, and  will have 6.5 million sq ft of trading space by the end of 2010, a 10% increase on last year.

In August, Primark signed a contract to open a second store on London’s Oxford Street, which will is scheduled to open before Christmas 2011.