Primark’s planned foray into the US could boost the value retailer’s growth by between 50% and 70%, management believe.
The figure, which assumes the retailer is successful following its launch in the US later this year, was shared at a meeting organised by broker Shore Capital with investors and John Bason, finance director of Primark parent ABF.
Shore Capital analyst Darren Shirley said Shirley said such a performance could take growth from “low double digits to close to 20%”, in the medium term.
Primark revealed plans to open its first US store in autumn 2015, and has already agreed to take on seven Sears stores.
Shirley told Retail Week that he expects Primark to roll out 750,000 sq m of space per annum in the States if the retaileris well-received by consumers. However he cautioned that “they haven’t traded a single day” in the US yet.
He said that management is “quite pleased” with the quality of stores Primark has taken from Sears. “They’ve been able to go in there without having to take any dogs,” he observed.
The relationship with Sears represents a significant opportunity for Primark if it gains traction in the US. “
Sears is engaged in a material change of strategy which could present ABF with a menu of very strong future locations for Primark, noting that of the seven deals agreed to date that ABF had the pick from the full menu of Sears’ north-east stores,” he said.
Primark plans to apply a “sub-regional” approach to growth in the US, “which management does not believe can be viewed as a single country,” said Shirley.
He suggested that once it completes its initial trials, Primark may expand beyond its initial north-eastern focus by leasing more former Sears stores.