UK: ABF reports Primark sales growth
Value fashion retailer Primark today (19 January) reported a rise in sales in the 16 weeks to 7 January, but admitted that operating margin fell as a result of higher cotton costs.
Parent company ABF said Primark sales rose 16% during the period. Like-for-like sales growth was "good" and "particularly strong" over Christmas after a slower start to the financial year due to the "unusually warm" autumn.
The company said that "as expected", operating margin was lower than the same period of last year, reflecting the continued absorption of higher cotton costs. "Cotton prices have fallen somewhat from their high point last year and we will begin to see the benefit of lower input costs in the second half," it added.
The 16 weeks saw nine new stores open, with two in Spain, three in Germany, one each in Portugal and the Netherlands and two in the UK. There are also plans to open three stores in Spain in March.
Consolidated sales, which include ABF's sugar, agriculture, grocery and ingredients rose 12%.
Commenting on the results, Conlumino lead consultant Matt Piner said: "Primark's fast fashion model remains sharply relevant, even as rival value players, such as Peacocks, falter.
"It offers financially pressed young shoppers a way to be able keep up with the latest trends in a way few others do. With cotton prices now falling again it can also begin to focus on restoring margins and profitability."
However, Charles Stanley analyst Sam Hart said that while there is potential for Primark to benefit from lower cotton prices, the "competitive environment is unlikely to ease in the near term and hence could see some of these gains reinvested in promotional activities".
Highlights from just-style's research store this week include a look at apparel sourcing in Asia, company profiles with consumer insights for Primark and TK Maxx, and a report on the top 750 men's clo...
Primark owner Associated British Foods today (12 July) reported 14% revenue growth in its retail division over the first half. ...
Leading global brands and retailers including H&M, Levi Strauss, Carrefour and Tesco have backed a three-year programme to clean up production in the Bangladeshi garment industry....
UK based value fashion retailer Primark today (11 May) confirmed that it has appointed Marks & Spencer's head of sourcing Garry Gordon as group sourcing director....
Executives from Wal-Mart, Metro, Marks & Spencer and Primark are taking part in a two-day event in London next week looking at the challenges facing the retail supply chain....
The number of high street stores entering administration shot up over the first quarter of this year, according to statistics from the Insolvency Service. ...
Young Dalit, (or Untouchables, as they were formerly labelled) women are continuing to suffer exploitative conditions in the Indian garment industry, according to a report released by Centre for Resea...
Top stories on just-style this week include a report on a fake Primark store opened in Dubai, the prospects for Burma as a production base, and a look at the corruption claims at Wal-Mart Mexico. ...
- Speed to market key to Adidas 2020 growth plan
- GAFTI gears up for change in apparel auditing
- SuperGroup to adapt sourcing model for speed
- Fast Retailing ramps up sustainability efforts
- Apparel software trends 2015: What else to watch?
- Transparency call for German apparel firms
- Strike at Adidas and Nike shoe factory in Vietnam
- Myanmar garments to benefit from export strategy
- H&M and Kering trial recycling technology
- Lululemon Athletica on “strong growth” track
- Global market review of workwear - forecasts to 2019
- Myanmar's Garment Sector - Opportunities & Challenges in 2015
- Management briefing: Outlook 2015: Apparel industry issues in the year ahead
- Outdoor performance apparel: peaks, valleys, and green fields
- Apparel Retail: Top 5 Emerging Markets Industry Guide