Pre-close results from value fashion retailer Primark released today predict a 13 per cent increase in sales for the firm’s full-year period.
Like-for-like trading grew by three per cent in the first half of the 52 week year ending September 17th 2011 and Primark now expects that performance to be matched during the second half of the period.
Intense discounting to tempt cautious consumers into its high street stores has impacted on the retailer’s margins however, which are now expected to be lower than initially thought.
A statement from Primark read: “At the time of our interim results, we expected operating margins to be lower in the second half reflecting higher input prices and the full effect of the absorption of the UK VAT increase.
“There has been a higher level of discounting than is normal towards the end of the summer season on the UK high street and operating margin is expected to be a little lower than forecast as a result.”
Although many UK high street operators are struggling at present and despite not having a presence in the booming e-commerce market, Primark has reported some growth in domestic trading whilst sales in continental Europe have soared.
During the second half the retailer has opened seven new stores, bringing its total additions this financial year to 19, representing 0.7 million sq ft of selling space created.
New outlets include ones in Scunthorpe, Ilford, Lings Lynn and Stockport in the UK, La Coruna in Spain, and two in Portugal, and there are two more significant openings due in the next few weeks.
The statement continued: “Before the financial year end we will open a 46,000 sq ft store in the new Westfield Stratford City shopping centre, next to the 2012 Olympic park, and a 52,000 sq ft store in Dortmund in Germany.
“This will bring the total number of stores to 223 by the year end and, having also completed a number of store extensions, we will be trading from 7.2 million sq ft of selling space.”