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Primark CFO: 'high street is not dead'

Primark does not believe that online retail will kill the high street, John Bason, chief financial officer at the retailer’s owner, Associated British Foods, has told Drapers. 

“There is a real fear that high streets will die,” said Bason. “And that because online has increased and continues to increase, we’re going to have windswept and empty high streets left. We don’t believe that. High streets will change, and you’ve just got to remain relevant.” 

Results announced on 6 November showed that Primark’s revenue was up 6% for the year to 15 September 2018. It remains focused on expanding its high street estate when others are cutting back on stores. 

Bason said: “Compared to most other retailers, we’ve invested in our high street estate and are opening exciting new stores and refurbishing existing ones. We’ve got a careful eye on the store environment, making sure it’s engaging and well merchandised.”

The retailer plans to open its new 160,000 sq ft premises at Birmingham Pavilions before Easter next year, followed by openings in Hastings and Bluewater in the spring and a new store in central Milton Keynes in summer 2019.

Citing London’s Kings Cross and Birmingham as two positive examples of high street regeneration, Bason welcomed the £675m Future High Street Fund announced in the recent Budget. 

However, he stressed the need for continued consideration of the digital services tax: “We don’t have a problem paying taxes, but there should be a fair burden and not an unequal burden for those with bricks-and-mortar stores.” 

In the US Primark has signed agreements for stores in New Jersey and Florida, opening in 2019 and 2020 respectively. These will take its total US store count to 11. Further locations will be announced, and Bason said they would be in “big metro city areas such as greater New York and places like Philadelphia”. It will also open further stores across Europe, including Bordeaux and Toulouse in France, Brussels in Belgium and Seville in Spain later in its 2018/19 financial year.

Bason added that, despite unprecedented continued warm weather into the start of the season, sales for the autumn collection were doing well: “We’ve been very encouraged by the autumn collection. We’re seven weeks into the new financial year, and although the first part was difficult because of continued warm weather, trading over the last few weeks has been very strong.”

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