Primark defies gloom with expansion plans
Discount fashion retailer Primark is to continue its march across Europe as it defies economic gloom on the continent.
The chain's owner, UK-based Associated British Foods (ABF), said that it intended to keep opening stores in countries such as Spain despite the fiscal turmoil in the country.
ABF, which is controlled by Canada's Weston family, which also owns Brown Thomas here and Selfridges in Britain, said revenue at the Primark business jumped 15pc to £3.5bn (€4.3bn) in the financial year that ended in the middle of September.
Adjusted operating profit also climbed by 15pc in the period, to £356m (€444m). Like-for-like sales growth was 3pc higher.
Primark, which has its headquarters in Dublin, trades as Penneys in Ireland with 38 stores here. In the entire Primark/Penneys chain there are 242 outlets. Its cut-price clothes have become a favourite of celebrities and high-street consumers alike.
ABF said that trading at newly opened Primark stores "exceeded expectations" and the opening of a new store in Berlin in July saw the most successful first day's sales ever. It added that sales to date of its autumn/winter ranges were encouraging.
Asked if ABF will consider making Primark a global brand, ABF chief executive George Weston reined in expectations.
"To look beyond Europe at this stage would be hubristic," he told Reuters news agency. "We only went into Europe six years ago. So, it is pretty new to us."
ABF's group revenue in the last financial year rose 11pc to £12.3bn (€15.3bn), while adjusted operating profit advanced 17pc to £1.07bn (€1.2bn) -- the first time it has breached the £1bn mark.
The company's interests also span a range of consumer foods, agri-products and sugar production. It owns brands such as Ryvita and Ovaltine, while it is the world's second largest sugar producer.
Revenue at its sugar division rose 25pc in the last financial year to £2.6bn (€3.2bn), while adjusted operating profit soared 62pc to £510m (€636m).
Analyst Martin Deboo at Investec in London said ABF's last financial year was an "annus mirabilis", but he said that despite the strong performances at Primark and the sugar unit, grocery profits fell 24pc and ingredient profits fell by 50pc.