Value fashion retailer Primark experienced “particularly strong sales” over the Christmas period and has today anticipated year-on-year sales growth for its first half-period, ahead of results published in April.
Revenues for the six months ending March 3rd 2012 are expected to 15 per cent higher than the same period last year, according to today’s trading update from its parent company Associated British Foods (ABF), and like-for-like sales are predicted to be up two per cent in the period.
Pressure on margins has continued over the winter but the group has to continued to manufacture growth through store openings both in the UK and in Europe at a time of constrained consumer spending across the continent.
The statement from ABF today read: “Trading at Primark started the financial year slowly as a result of the unusually warm autumn but, Primark enjoyed…particularly strong sales over the Christmas period and good trading since the New Year considering the economic climate.”
“As expected, operating margin will be lower than in the same period last year reflecting the continued absorption of higher cotton prices. Cotton prices have fallen somewhat from their high point last year and we will begin to see the benefit of lower input costs in the second half.”
Two new stores were opened by Primark during H1, including a new flagship on Edinburgh’s Princes Street unveiled just before Christmas, along with two new shops in Spain, three in Germany, and one each in Portugal and the Netherlands.
Its outlet at the Metro Centre in Gateshead was relocated to a bigger unit and two new concessions opened in Selfridges stores in Birmingham and Manchester during the period, meaning by the end of the half Primark will operate from 232 selling locations and will have increased its total selling space by 500,000 sq ft to 7.8 million sq ft compared to this time last year.
Primark’s statement continued: “We expect to open a number of stores in the second half, the largest number of which will be in Spain, and together with the further store extensions our selling space will increase to 8.2 million sq ft by the year end.
“Capital expenditure on new stores and refits for the full year is expected to be similar to last year.”