18 hours ago | By Alice Gividen
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Vive la France! Anglo-Irish value fashion chain Primark delivered its expected “very successful” fiscal 2013/14 trading year results on Tuesday punctuated with the usual set of sales gains. But the big news was its performance in France.
Alongside some “very high sales densities” achieved by stores opened in the last 18 months, owner ABF said France “has been our most successful new market entry to date”.
No figures here but France traditionally being a tough market to crack, that was great news.
But what about the US, we hear you shouting… Primark made no comment on it in the official results announcement but ABF chief George Weston did say its first store is trading well and customers have been amazed by the low prices. Beyond that, he wasn’t prepared to say given that the store has only been open eight weeks and is, after all, only one store. We do know however that there’s still plenty of investment cash for Primark so expect more stores soon.
Back with those results, with new markets performing well, it was no wonder sales at Primark were 13% ahead of last year in constant currencies, mainly driven by a 9% increase in retail selling space. Same-store sales came in a more modest 1% ahead of last year “reflecting a strong performance across a number of countries”.
But if the year was so successful, how come the comp sales gain was relatively low? Primark noted that comp sales in the early part of the fiscal year were impacted by the same unseasonably warm autumn that hurt so many of its rivals. While its performance picked up and the slow autumn was followed by strong trading across the important Christmas period, spring trading was also held back by cool weather followed by strong trading in Q4.
Even the most dynamic retailers, it seems, can’t beat the weather.
Back with the good news, the company said: “Spain, Portugal and Ireland all performed very well throughout the year and the UK delivered a positive like-for-like performance.”
However it also admitted the success in these markets was “partly offset by the impact that the opening of new stores in the Netherlands and Germany had on existing stores in that region, albeit that this effect reduced in the fourth quarter.” The company has highlighted this problem already during 2015 so that came as no surprise.
The “very successful” year also led to an unusually low level of markdowns but “as anticipated, markdowns returned to more normal levels this year with a consequent reduction in operating margin.”
Not that this is likely to hold Primark back. During the fiscal year Primark opened almost 1m sq ft of selling space bringing the total store count to 293 stores and 11.2m sq ft.
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