Primark rules out widespread retail park expansion despite its sucessful debut

The value retailer opened its first retail park store at MK1 Shopping Park in December which Bason insisted had traded “really, really well”. However he insisted its focus will be prime locations with lots of passing traffic.

Bason said: “I don’t think big sheds on its own is where Primark will go. We always like places where people get on buses and trains to.”

The retailer, which opened 15 stores in its first half, will hit the expansion trail again in the first half of next year, focusing on Germany and Iberia, where Bason said there was more opportunity in terms of property.

However, he said he still expected to expand in the UK as there are still some key cities in which it has no presence.

Despite Primark supply chain director Martin White issuing a rallying cry to the supply chain industry earlier this month to device an online model which could stack up for the value retailer, Bason insisted that it had no immediate plans to launch a transactional site. He also ruled out selling wholesale online via sites such as Asos.

He also said it had no plans to expand its growing overseas business by entering franchise agreements and said the retailer preferred to “do it ourselves.”

Its overseas expansion will be focused on a few markets where it already has a presence rather than launching in new markets. “We want to grow this business in a sensible way,” he said.

Primark, owned by Associated British Foods, revealed that like-for-likes are expected to soar 7% in its first half to March 2 thanks to weak comparatives and “good trading” over Christmas.

Overall sales were “exceptionally strong” in the first half and are expected to rocket 23% against last year, or 25% up in constant currency.

Primark’s operating profit margin was “much higher” than the comparable period, helped in part my lower cotton prices, which Bason said had a “big impact” on its margins.

House broker Panmure Gordon forecasts first half margins rose by 170 basis points to 11.2%

The retailer expects to gain no further benefit from lower cotton prices in the second half.