Primark capitalised on demand for seasonal products

Primark capitalised on demand for seasonal products

Value fashion giant Primark has revealed sales growth over the Christmas period driven by increased selling space and high sales densities in stores opened during the last year.

Sales rose by 15% at constant currency rates for the 16 weeks ended 3 January. Despite unseasonably warm weather throughout Autumn, Christmas trading was strong, with Primark capitalising on demand for seasonal products such as festive jumpers.

Growth, however, was impacted by the weakness of the Euro against Sterling, with growth at actual exchange rates 12% ahead of the previous year.

Operating profit margin in the period was in line with expectations, that is, lower than last year as a result of a higher level of mark-downs.

Nonetheless, the company said good progress has been made in building the management team in the US in anticipation of its launch in late 2015. Primark has signed eight leases in the north east of the country, including seven from Sears, and a lease has been signed for warehouse space in Pennsylvania.

Anusha Couttigane, senior fashion consultant at Conlumino, said Primark will likely take "a more measure approach" with its pipeline for European expansion planned over a number of years.

"The Continent remains critical to Primark's long term strategy, and the group is keen to have the necessary infrastructure in place first; its Mönchengladbach warehouse, which has been extended to increase capacity by 60%, is now fully operational. Yet it is Primark's first steps into the States later this year that will no doubt represent the highlight for 2015."

Group revenue for the period was 3% ahead of the same period last year at constant currency, and 1% ahead at actual exchange rates.