Fast Fashion Retailer Primark Expects Sales In Holiday Season To Exceed Expectations

Cheap Britain

Retailer

Stores Ltd. exceeded the expected holiday season sales performance to stimulate the parent company Associated British Foods PLC PLC (ABF.L), the British Union food group (ABF) shares rose sharply to 7.1% to 2333 pence on Thursday.

ABF said Primark Stores Ltd. Ltd. sales increased by 4% over the first 16 weeks of January 5th, compared with a slight decrease of 0.8% compared with sales, but the sales generated by the new retail area were enough to offset. More importantly, ABF said it had contributed more than half of sales and profits to the group.

In the first quarter, business profit margins increased and profits increased.

John Bason, chief financial officer of ABF, pointed out that retailers were generally challenged before Christmas and before the end of the conference, but this group of data shows that Primark has emerged as a winner.

Previous market research has suggested that British retail industry has recorded the worst performance since the last financial crisis in 2008, regardless of clothing retailers, department stores and even the biggest fashion online retailer ASOS PLC (ASC.L).

ABF said that British sales of Primark Stores Ltd. Ltd. were better than expected in the Christmas season, and the comparable sales growth in 9-11 months also made up for the passenger traffic which declined in November due to warm winter and "black five".

In the context of market contraction, the brand's first quarter sales increased by 1% annually, and the market share of local clothing increased significantly.

John Bason believes that the reason they beat their peers is investment in stores and low pricing.

From the current retailers who have announced the performance of the holiday season, it is easier for brands to do business with younger consumers, such as Primark, and Boohoo and PrettyLittleThing, such as the online retailer Boohoo Group PLC (BOO.L). The latter, according to the expected performance of an increase of 44% in the holiday season, announced this week that the annual sales growth outlook will be increased from 38%-43% to 43%-45%.

The euro area sales of fixed exchange rate Primark Stores Ltd. Ltd. increased by 5% compared with the same period last year. France, Belgium and Italy were particularly strong, and the brand's second largest market - Spain's performance increased, but Germany continued to be weak.

Sales in the United States also improved significantly. The group mentioned in particular that the New York branch of Broolyn, which opened last July, was "very strong".

According to the world clothing and shoe net, as of January 5th, Primark Stores Ltd. has 364 stores. The sales area increased from 14 million 200 thousand square feet in the same period last year to 15 million 100 thousand square feet. During the first quarter, the sales area increased by 300 thousand square feet, accounting for 1/3 of the annual target.

Liberum Waldschmidt analyst Robert Waldschmidt believes that continued store expansion can help Primark Stores Ltd. continue to increase its market share.

As the EU deadline for March 30th is getting closer, John Bason said that Europe will not have a significant impact on Primark Stores Ltd., because their products will directly enter the UK or EU 27 country market after purchasing from Southeast Asia, and do not rely on the trade between the United Kingdom and the EU 27 countries.

At the same time, he warned that there was no agreement to be "hasty and reckless". ABF also had huge sugar, food and beverage, agricultural and raw materials businesses, and its brands include Twinings, Chuan Ning, Ovaltine, A Hua, etc.

Associated British Foods PLC (ABF.L) reported a 2178 pence on Wednesday, with a 20.9% decline in the past 12 months.

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