Primark‘s owner Associated British Foods expects its turnover will be artificially boosted thanks to the pounding the British pound received after the Brexit referendum.
Half of turnover comes from abroad
When ABF revealed its six-month financial results in April, it became clear that Primark’s like-for-like turnover dropped (about 1 %) for the first time in 12 years. Two weeks after the infamous referendum, the group is more defiant about its prospects in a trading update, stating that the weaker pound (compared to the euro and mostly the dollar) will offset that like-for-like turnover drop entirely.
The entire group gets about half of its turnover from outside the United Kingdom, meaning it will take advantage of the so-called “translation effect”, which is what happens when you transfer foreign profits (in dollar and euro) into the parent company’s currency (pound sterling).
ABF also informed that Primark’s sales grew 7 % in the 40 weeks leading up to 18 June, including 11 new stores in the last three months. The like-for-like turnover did suffer “because of the unpredictable weather”, particularly with a very cold April.
The company will not let the Brexit interfere with its Primark expansion plans: “These remain the same.” Over the next few months, it will open another two stores in the United States (near Philadelphia and in New Jersey), while it will remodel its Parisian store (in Créteil) and double its store space..
