Primark sales increase 17 percent in FY14

REPORT_ Sales at Primark, a part of Associated British Foods, were 17 percent ahead of last year at constant currency at the end of September 13, 2014. This positive development was driven by an increase in retail selling space with like-for-like sales growth of 4 percent, and rise in sales in the new stores. Company saw excellent sales over the Christmas period and boosted sales in the third quarter due to warm weather. Company began trading in France in December last year and sales across all five stores have been positive.

Eight years after its initial entry into Iberia, this year’s like-for-like growth achieved by its Spanish stores was particularly strong. The adjusted operating profit margin in the first half was higher than last year reflecting the benefit of warehouse and distribution efficiencies and lower freight rates. These benefits continued in the second half and, with strong trading over the summer resulting in a lower level of markdowns, the margin for the full year reached 13.4 percent.

In the immediate aftermath of last year’s collapse of Rana Plaza in Bangladesh, Primark committed to meeting its responsibilities in full and to paying long-term compensation to the workers employed by its supplier or their dependents. The pace of selling space expansion quickened further this year with the gross addition of 1.4 million sq. ft. Company relocated three stores, extended three stores and opened in 25 new locations. It now has a strong pipeline of new stores in Europe extending over a number of years. It has already opened five new stores since the year end: one in Portugal, two in the Netherlands and two in Germany, with a further five scheduled to open before Christmas including relocation in Northampton to a store more than three times the size.

Company expects to increase in selling space for the financial year to be a little less than 1.0 million sq. ft., to be followed in the autumn of 2015 by a strong programme of European openings. Company has also decided to take Primark to consumers in the north-east of the US. It has chosen stores which are located close to areas of high urban density and which benefit from high levels of existing customer footfall. A lease for some 70,000 sq. ft. of selling space at Downtown Crossing in the heart of Boston, Massachusetts was signed in April and company expects this store to open in late 2015. It has also signed the lease of a further seven stores in this region including an 80,000 sq. ft. store in the King of Prussia shopping mall in Pennsylvania, US. All eight stores are expected to operational by late 2016.