Blog: Retailers expand despite margin hit

Joe Ayling | 3 May 2011

Last week saw value fashion retailer Primark warn of continued weakness in the UK retail market, while planning further store openings in mainland Europe.

Reporting an 11% revenue rise for the first half of the year, Primark said that a combination of price competition and higher cotton prices remained a challenge to margins.

Nevertheless, Primark now operates 214 stores and is planning to open five stores in Germany early next year.

Another UK high street operator, JJB Sports, secured a GBP65m (US$106m) fundraising plan last week, while US retailer American Apparel has been rescued by $14.9m in new financing from a group of Canadian investors.

Also last week, Italian luxury fashion house Prada Group inked a deal to open retail stores for its Prada and Miu Miu brands across the Middle East. A joint venture company, with UAE-based Al Tayer Insignia, will be established in Dubai.

UK footwear chain Clarks, meanwhile, whose expansion into global retail markets including China and North America now rivals its domestic sales, has completed a joint venture deal to operate in India.

The venture, with Indian retail powerhouse Future Group, has opened a first Clarks store in New Delhi - with 20 more stores due by the end of the year.

Last week's news demonstrates how some clothing and footwear retailers are exploring the potential of new retail markets as they fight against rising cost pressures. Others, such as JJB and American Apparel, meanwhile, will remain focused on keeping their heads above the water.


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