Next year, Primark wants to open 19 more stores – including a first one in Poland. A webshop however is still not on the cards.
Investing in the high streets
John Bason, finance director at Primark’s owner AB Foods, said to Bloomberg that “We are the people investing in the high street and in the UK. That distinguishes Primark from our competitors.” The Irish chain expects to end its financial year on 14 September with a 4 % turnover growth (excluding exchange rate fluctuations) but has its expansion strategy to thank for that: like-for-like turnover drops 2 %.
In the Euro zone, Primark expects a 5 % growth as especially Belgium, France, Italy and Spain are performing well. The like-for-like turnover drop is caused mainly by disappointing sales in Germany. Another factor is the growth of online fashion sales, a phenomenon that Primark refuses to join – not through its own channels, not on third party platforms.
New stores galore
The only option for Primark is to keep opening new stores, which it does with gusto: fourteen stores were opened this year (including a mega store following a new concept in Birmingham), creating a total of 373 stores in 12 different countries, good for 1.4 million square metres of surface. Next year, nineteen stores will be added to that, including a first store in Poland.
Parent company AB Foods says it is ready for a possible brexit, but warns that costs may be higher next year when the pound further weakens as Primark mostly purchases in dollars, but sells in pounds and euros. The company also warns that operational margins will probably be lower than this year’s 11.7 % as a result of this.
