Half-year sales at Primark are expected to be 11% ahead of last year at constant currency, driven by increased retail selling space, its parent company said yesterday.
The retailer, which targets the entry-level lingerie market with sets ranging from £5 to £10, is ramping up store space as part of its strategy to maintain growth.
Last year was a 53-week year for Primark and, as a result, this financial year started one week later than last year. On a comparable week basis, total retail sales at constant currency are expected to be 12% ahead, and 22% ahead at actual exchange rates. The increase in average retail selling space in the first half, compared with the same period last year, was 12%.
Stock was well managed again this period and markdowns were in line with the first half last year, according to owner Associated British Foods. As forecast, the operating profit margin in the first half will decline, mainly reflecting the strength of the US dollar on input costs.
Foreign exchange contracts are now in place for the majority of the remaining purchases for this financial year and the retailer’s expectation for operating profit margin decline for the full year is unchanged.
The new store opening programme in the first half was very strong. Retail selling space has increased by 800,000 sq ft since the financial year end and, at 4 March 2017, 329 stores will be trading from 13.1 million sq ft worldwide.
16 new stores were opened in the period comprising relocations in Reading and Sheffield to larger, more central locations, as well as new UK stores in Carlisle, Stafford, Truro, York and Colchester.
Primark’s store at the Tottenham Court Road end of Oxford Street in London was extended by almost 40%, increasing square footage to 114,000 sq ft, making it one of the company’s largest stores after Manchester and Newcastle.
It expects a total of 1.3 million sq ft of new selling space in this financial year, with a new UK launch in Uxbridge planned for this quarter. A new warehouses in Islip, Northamptonshire, is now operational, it confirmed.