Penneys looks to Europe for growth
PennEys owner Associated British Foods (ABF) will speed expansion of the Dublin-headquartered discount fashion chain across Europe as it continues to lure shoppers from Portugal to Germany.
ABF said results for its Primark division had been "remarkable" in the financial year to the middle of September.
Sales at the chain jumped 22pc to £4.27bn (€5.08bn), while adjusted operating profit rose 44pc to £514m. Like-for-like sales at the division advanced 5pc.
Overall group sales – which include revenues from its grocery and sugar units – were 9pc higher at £13.3bn, beating expectations. Adjusted pre-tax profit was up 13pc at just under £1.1bn.
ABF said sales at Primark had been affected by two periods of unseasonable weather. It added that sales in its northern continental European stores were strong throughout the year and like-for-like sales growth in Spain, which was initially held back by the large number of new store openings there, improved later in the period.
The first Primark store in France is due to open next month in Marseille and the company still sees massive scope for expansion across the continent. There are 38 stores in Ireland that trade under the Penneys name. The company was founded in Ireland in 1969. It has recently sought planning permission to link two adjacent buildings in the capital, one of which already houses a flagship store.
ABF chief executive, George Weston, pointed out that Primark still does not have a presence in Italy, eastern Europe or Scandinavia. In Germany, the chain currently has just 10 outlets, and Mr Weston believes that "one day" the number will hit 100.
Mr Weston and his family control ABF. The family also own Brown Thomas and Selfridges and are reportedly interested in buying loans attached to Arnotts.
ABF said that its Primark and grocery units will drive profitability in the current financial year. The group owns a range of household brands such as Ryvita, Twinings and Blue Dragon. Its most successful product is Twinings Ovaltine.