Sales at Primark have recovered after a “difficult” Christmas trading period thanks to tighter buying and the popularity of transitional pieces, John Bason, finance director of its parent company, Associated British Foods, said this week.
Primark spring 16
The value retailer said sales are forecast to be up 7.5% on a constant currency basis for the six months to February 27. Like-for-like sales are expected to be level with 2015 after business picked up following its post-Christmas trading update in January.
Bason said the unseasonably warm weather in the run-up to Christmas led to a period of “weak” trading, but this was carefully managed by Primark’s buying team.
“They were able to manage it,” he told Drapers. “Sales were disappointing pre-Christmas, but the fact that we don’t have a bigger stock inventory to shift through markdown now reflects the work of the buying team. We are pleased with the way our strategy has worked.”
Bason added that transitional pieces, such as jersey and denim, are performing “really well” so far in 2016.
Internationally, the French market was “buoyant” and like-for-like sales were strong. Trading at its two new stores in the US have been “encouraging” as the range and concept have been well received, Associated British Foods said. It will open a further six stores in the US later this year and a 70,000 sq ft store in the American Dream shopping mall in New Jersey in 2017.
Over the last six months Primark has opened six new stores, including a 133,000 sq ft unit on Gran Via in central Madrid in October.
The retailer will also open its first Italian store in Arese, northwest of Milan, in April and it is planning to open in a mall north of Florence by the summer of 2017.
Bason said the retailer will focus on expanding its retail footprint in its current markets and Italy, rather than launching into any more new territories this year.