During a difficult period for UK traders value fashion retail chain Primark has seen sales grow by 16 per cent year-on-year, results published today reveal.
The retailer, owned by Associated British Foods (ABF), described like-for-like sales growth in the 16 weeks to January 7th 2012 as “good” without publishing a figure, but did say that the Christmas period had proved “particularly strong” in today’s statement.
Operating margins were hit by the higher input costs and increased discounting seen on the UK high street but with cotton prices falling of late the group expects margins to improve over the next six months.
Primark continued with its international expansion plans during the quarter with an extra 0.5 million sq ft of selling space added to its total store portfolio.
Along with new stores in Spain, Germany, Portugal and the Netherlands, closer to home its unveiled two stores in the UK including a new flagship in Edinburgh, Scotland that opened its doors just before Christmas.
A store relocation to a much bigger premises in Newcastle and concessions in Selfridges stores in Birmingham and Manchester further extended the retailer’s reach.
Commenting on the results, Matt Piner, Lead Consultant at Conlumino, said: “Primark’s fast fashion model remains sharply relevant, even as rival value players, such as Peacocks, falter.
“It offers financially pressed young shoppers a way to be able keep up with the latest trends in a way few others do.
“With cotton prices now falling again it can also begin to focus on restoring margins and profitability.”
ABF is planning to make a similar level of capital investment in the Primark brand over the course of this full-year as it did in the last, and three new stores are already scheduled to open in Spain during March.