Primark Posts 'Magnificent' 30% Profit Rise

Written By Unknown on Rabu, 05 November 2014 | 00.25

The chairman of Primark's owner has hailed a "magnificent" year for the discount clothing retailer, with profits rising 30% to £662m.

Associated British Foods (ABF) said the performances of its fashion and grocery divisions offset the adverse impact of lower prices in its sugars business, helping the group to achieve annual profits growth of 6% in the year to 13 September.

It also confirmed that Primark was shrugging off the effects of the current warm autumn weather, which has prompted rivals including Next to warn on profits, with sales for the first six weeks of its new financial year up 10%.

Annual sales at Primark, which now operates in nine countries, were 17% ahead of last year.

The results statement said: "This excellent result was driven by an increase in retail selling space, like-for-like sales growth of 4%, and superior sales densities in the new stores.

"The year was characterised by success for our autumn/winter and spring/summer ranges.

"Sales over the Christmas period were excellent and were boosted in the third quarter by warm weather, especially in the spring and early summer.

"We began trading in France in December last year and sales across all five stores have been exceptional.

"Eight years on from our initial entry into Iberia, this year's like-for-like growth achieved by our Spanish stores was particularly strong."

ABF chairman Charles Sinclair added: "We recently announced that the next new market would be in the north-east of the US, with the first stores expected to open late in 2015 and with up to 10 stores by the end of 2016."

Primark also confirmed it had committed a total $12m (£7.5m) in compensation and other support to workers and families of the victims following the collapse of the Rana Plaza factory in Bangladesh last year.

The retailer said that while most of its Rana Plaza staff were making garments for its competitors when the building collapsed, it was "committed to meeting its responsibilities in full and to paying long-term compensation to the workers employed by its supplier or their dependants".

"The safety of the staff employed by our suppliers is a high priority," Primark said.

"We have now undertaken structural assessments of all of our supplier factories in Bangladesh.

"We further strengthened our in-country teams of ethical trading specialists who are critical in supporting sustainable improvements within supplier factories, and providing greater visibility across the supply chain.

"We conducted 2,058 audits in the last calendar year, and ethical trade training continues to be provided to every new Primark employee," the company added.


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