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European expansions push Primark sales up by 14pc

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Primark, which trades as Penneys in Ireland, said shares were down as much as 5.4pc in London.

Primark, which trades as Penneys in Ireland, said shares were down as much as 5.4pc in London.

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Primark, which trades as Penneys in Ireland, said shares were down as much as 5.4pc in London.

SALES at clothes chain Primark are expected to be up 14pc on last year after "very strong" growth and further European expansion.

The increase has been driven by a 4pc rise in like-for-like sales for the six months to the end of February, as well as expansion into new stores where "sales densities" or volumes per square foot, are reportedly higher.

Figures for Primark – which trades as Penneys in Ireland – were published by its parent company Associated British Foods (ABF).

It said revenue in the first eight weeks of the financial year were held back by unseasonably warm weather and strong comparatives in the previous year, but the rest of the period saw excellent trading including the Christmas period.

The sales soared despite controversies surrounding the Rana Plaza factory disaster in Bangladesh in April, when 1,129 workers were killed and about 2,500 injured when the garment factory building in Dhaka collapsed.

London- based ABF said it is expecting its operating profit for the first half to be in line with last year as lower profit from sugar will be offset by the performance from Primark and encouraging results from grocery and ingredients divisions.

Its interim results for up to March 1 are scheduled to be announced on April 23.

It stated that operating cash flow in the first half will be further improved, driven by a good working capital performance, particularly at Primark where effective inventory management and strong trading have resulted in lower stock holding levels.

"Retail selling space has increased by 0.6 million sq ft since the financial year end and – at March 1 2014 – 269 stores will be trading from 9.6 million sq ft," the company said.

It has 38 Penneys stores in Ireland and opened 16 new stores across Europe in recent months including its first two stores in France, in Marseille and Dijon.

"In Spain we opened six new stores and closed the smaller of our two stores in La Coruna and Zaragoza, bringing the total there to 39," it continued.

Elsewhere it aims to open two more stores in Germany, three in the UK, and is relocating its first shop in Spain – Plenilunio – to a premises twice its size.

Irish Independent