Primark heralds ‘placing’ gross sales figures however New Look says 85 shops will shut | Enterprise

Primark has bucked the retail gloom with “placing” annual figures exhibiting that its “low-cost stylish” is drawing customers to the excessive avenue at a time when rivals are closing shops.

The corporate stated gross sales at UK shops open for multiple 12 months had risen 1.2% within the 12 months to 15 September at a time when British retailers confronted a slowdown in style gross sales. The annual improve got here regardless of a tough second half when the summer time heatwave stored customers from the excessive avenue. Annual income jumped 15% to £843m.

“The efficiency within the UK was placing, with a big improve in our share of the overall clothes market,” stated George Weston, the chief government of the Related British Meals (ABF) dad or mum group.

Primark’s efficiency was in distinction to the struggling New Look chain, which stated at the least 85 shops would shut as a part of the restructuring plan introduced earlier this 12 months.

In March, New Look predicted 60 closures because of its firm voluntary association (CVA), however extra landlords have opted to take again the keys somewhat than comply with decrease rents.

New Look’s government chairman, Alistair McGeorge, stated the way forward for one other 39 shops was doubtful as talks with landlords continued. The veteran retailer has shored up New Look’s monetary efficiency since returning to the helm a 12 months in the past, however the pattern continues to be downward, with like-for-like gross sales 3.7% decrease within the 26 weeks to 22 September.

Vogue retailers have confronted an ideal storm this 12 months as rising prices following final 12 months’s enterprise charges revaluation had been compounded by weak client spending and a shift to on-line purchasing.

Buyers are braced for disappointing figures from Marks & Spencer on Wednesday, which some analysts suppose will present clothes gross sales down greater than 2% because it struggles to arrest an extended interval of decline. M&S plans to shut 100 outlets by 2022.

Primark – the UK’s third largest clothes retailer, behind Subsequent and market chief M&S – is a uncommon exception nowadays because it doesn’t promote on-line. It has defied this 12 months’s gloom and efficiently exported its bricks-and-mortar enterprise mannequin abroad to main new markets together with the US and Spain.

Weston stated the retailer used the web to create a buzz round new ranges amongst nearly 13m customers who’ve subscribed to its social media feeds. “We will promote garments in our shops extra cheaply than on-line,” he stated. “If you’d like the best-value clothes, it’s a must to go right down to the excessive avenue to get it.”

Primark will open greater than 1m sq ft of recent promoting area within the coming 12 months, with shops deliberate in mainland Europe in addition to within the UK, together with its largest up to now, a 160,000 sq ft department in Birmingham Pavilions.

ABF, boosted by Primark’s robust outcomes, was the most important riser on the FTSE 100 on Tuesday, closing up 3% at £24.60. Throughout the ABF group, which additionally encompasses giant grocery, agriculture and elements companies, general income had been up 3% at £1.4bn on gross sales of £15.6bn. Its grocery manufacturers embody Kingsmill bread, Twinings tea and Silver Spoon sugar.

Weston warned {that a} no-deal Brexit may trigger main disruption even when corporations tried to arrange for the worst by stockpiling elements, packaging and completed merchandise. “The truth is, if we lose Dover, we’re in hassle,” stated Weston. “If the Channel tunnel not turns into a usable freight route as a result of the French don’t have the customs functionality on their facet, then the UK meals provide chain will wrestle.”

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