Increased retail space fuelled Primark’s growth last year as the company’s value fashion proposition resonates beyond the UK in markets including Europe and the U.S. The weak pound is proving a positive gain as two thirds of the revenue is generated outside of the UK.
Steve Miley, Senior Market Analyst at AskTraders.com told FashionUnited: “Primark continues to deliver on sales growth driven by increased selling space with an expected 4 percent growth in constant currency. Like for like sales are expected to record 2 percent decrease due to unfavourable weather. The impact of new stores opened on the sales growth is prevalent in the UK where like for like sales have recorded a 1 percent contraction whilst the top line figure shows a 3 percent expansion.”
“The European and US divisions continue to grow fuelled by organic growth as well as increase in selling space with 14 stores being opened over the year. The expansion will continue into the next year with plans to add 1 million square feet of additional selling space in 19 new stores in France, Spain, Netherlands, Poland and UK. The strategy of delivering “Amazing fashion” at “Amazing prices” has paid out for the company as a whole in an environment of increasing competition on the online space.”
“With two thirds of the revenue generated outside the UK the company has announced the completion of the Brexit preparations and has put the contingency plans in place in case of disruptions caused by Great Britain exiting the EU. The cash levels held at the end of the period will allow the company to navigate unforeseen events caused by the departure from the European block.”
Primark will announce its full year results in November.