Primark will open 10 new shops before Christmas as it continues with its expansion plan, the budget fashion retailer’s owner Associated British Foods (ABF) said. The announcement comes after ABF held firm on its trading guidance for the year ahead of its annual general meeting on Friday.
Michael McLintock, chairman of the business, maintained its forecasts despite warning the company expects “further significant input cost inflation” over the current financial year. However, the firm said cost volatility has “diminished” since its previous update.
Mr McLintock added: “For the full year, we continue to expect significant growth in sales for the group, and adjusted operating profit and adjusted earnings per share to be lower than the previous financial year.”
ABF also told shareholders on Friday that trading at Primark so far this financial year has been “encouraging” despite increased pressure on household budgets. It said Primark is “on track” to open 27 new shop this financial year, with 10 to open in the run up to Christmas.
According to The Mirror Primark is planning to expand across Europe and the USA. It has plans for 10 new shops in North America, four in France, four in Italy and three in Spain. Two more stores will open in Romania, one in Slovakia, two in Poland and two in Northern Ireland, including one store that has been refurbished.
Last month the chain said it was opeing four new stores in the UK as part of a £140m high street investment plan. The new Primark stores will be in Bury St Edmunds, Craigavon, Salisbury and Teesside Park.
The clothing giant now has 190 UK shops, employing 30,000 people. In the UK, it has just launched its click and collect trial, allowing customers to shop online for the first time. Around 2,000 products are available to click and collect across 25 stores - including around 800 exclusive to the service.
Meanwhile, the firm, which also owns grocery brands like Twinings and Patak’s, said profits in its food business are expected to be higher than last year. RBC equity analyst Richard Chamberlain said: “We expect a strong recovery in sales given ongoing good recovery trends for store-based retailing, but margins are likely to be impacted by currency and other inflation pressures, and as Primark appears to be investing more in improving the convenience of its offer.
“On the food side of the business we expect grocery and ingredients margins to be pressured by higher input costs from energy, logistics and commodities, but sugar should see improved profitability, helped by firmer European and world sugar prices, albeit this remains a volatile business.”
Shares in the company were down 0.3% at 1,649.9p in early trading.
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