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Primark like-for-like sales draw level with last year

Primark cumulative like-for-like sales have improved since its January trading update and are now level with last year.

Total first-half like-for-like sales growth for the group were hampered by the unseasonably warm weather in autumn across northern Europe, as well as by the impact of new store openings in the Netherlands and Germany, on existing stores.

In a pre-close trading update for the period to February 28, Primark said sales are expected to be 16% ahead of last year at constant currency, driven by an 11% increase in retail selling space and high sales densities in new stores opened during the past year.

The retailer’s sales are expected to be 12% ahead of the same period last year at actual exchange rates due to the weakening of the euro against sterling.

The five French stores opened over the past year have traded “exceptionally well”, according to Primark owner Associated British Foods.

Operating profit margin during the period is said to be in line with expectations, although it is lower than last year due to a higher level of markdown.

The company has 287 stores trading from 10.7 million sq ft of retail selling space, having opened 10 new stores since the financial year end, including the relocation of the Northampton store to larger premises.

Primark opened four stores in the Netherlands, bringing the total in the country to 12, and increasing space by 60%, in addition to three stores in Germany. It expects to increase selling space in the current year by less than 1 million sq ft, including new stores or extensions in Germany, Belgium and the UK.

It also doubled warehouse capacity at Torija, northern Spain, at the beginning of the year and has extended the Mönchengladbach warehouse in Germany by 60%. The company also plans to open a new warehouse in the autumn in Bor, on the western border of the Czech Republic, to service stores in Austria and Germany.

In the US, Primark has announced six of the eight stores it will open later this year, including Downtown Crossing in Boston and five in the following shopping malls: King of Prussia and Willow Grove Park, Pennsylvania; Staten Island, New York; Danbury Fair, Connecticut; and Freehold Raceway, New Jersey. It has also signed a lease for warehouse space located in the Lehigh Valley area of Pennsylvania.

@Tara_Hounslea

 

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