Primark expects full year sales to be up by 13% at constant currency for the year ended September 12, as it prepares to open its first store in the US in Boston later this week.
The value retailer’s annual sales rise will be mainly driven by a 9% increase in selling space, with like-for-like sales up by 1%. Very high sales densities have been achieved at stores opened in the last 18 months, with France highlighted as the most successful new market entry to date.
Sales are expected to be 8% ahead of the previous year at actual exchange rates, thanks to the weakening of the euro against sterling.
Operating profit will be down on last year and close to that of the first half, due to higher markdowns and the stronger US dollar on purchases for the autumn 15 range. The strength of the US dollar is expected to have an adverse effect on margins in the first half of next year but Primark said a good proportion of the impact has been mitigated by buyers as they firm up orders for next year.
During the year which ends on September 12, Primark will have opened almost one million sq ft of selling space, bringing its total to 293 stores and 11.2 million square feet.
It will have opened 20 new stores, including relocations to larger premises in Northampton and Murcia, Spain. Primark closed its store on The Headrow in Leeds following the success of the larger store at the Trinity shopping centre, which opened in December 2013. It also closed smaller stores in Margate and in Naas in the Republic of Ireland, bringing the net total of stores opened to 15.
Primark also opened new space in the Netherlands, Belgium and six stores in Germany, the largest of which are in Dresden, Braunschweig, Krefeld and Weiterstadt.
The retailer is embarking on its US launch with a 77,000 sq ft store at Downtown Crossing in Boston set to open on Thursday (September 10). The new store will be followed by six other US stores totalling 400,000 sq ft, most of which will open next year.
It has scheduled a total of 1.5 million sq ft of new space for the next financial year, mainly in the UK, the US and Spain.
Spain will include a flagship,132,000 sq ft, store on Gran Via in central Madrid; France will have new stores in Lyon, Nice and Toulon in France, as well as the first Italian store in a new shopping centre in Arese, northwest of Milan, in early summer.
Primark will relocate its Magna Park UK warehouse next year to a larger site at Islip in Northamptonshire, close to its existing warehouse at Thrapston, and warned there will be some dual running costs for a short period.