Primark bounces back: launches store expansion over five years

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RIMARK declared a return to form today after a delicate pandemic, with shareholders to take advantage of a special division and buyers to see new stores popping up.

The fast-paced fashion house, which doesn’t sell on the internet, has suffered as much as any retailer, with critics increasingly questioning its business model.

Today, George Weston, CEO of parent company ABF, said his confidence in Primark was “unaffected”.

The group plans to open another 132 stores over the next five years, with the United States, France, Italy and the Iberian Peninsula being the most ripe markets for expansion.

There will also be growth in the UK, although there are already 192 stores here.

London stores, Weston noted, are lagging behind the recovery in the rest of the group due to the lack of tourists.

Primark’s sales are still down 12% from pre-pandemic levels, but stores made a profit of £ 415million for the year ending September, a 15% increase from at the last time.

ABF didn’t pay a divi last year to save money. Today he announced a final divi of 20.5p and a special divi of 13.8p, which leaves the payment still shy from before Covid, but not far.

Across the group, including food, profits were up 2% to £ 1.01bn, with profits down 1% to £ 908m.

Weston is optimistic. “Things have been bumpy but are gradually improving. London is feeling a lot busier than it was, we are nearing the end of the pandemic, ”he said.

Shares jumped 122p, 6.5%, to 1980p.

Some critics remain skeptical.

Dan Lane of Freetrade said: “Perhaps shareholders could ignore this morning’s results as yet another set of numbers infected with a virus, but the simple example of not adjusting when it was most needed them. will lead to thinking about how management might tackle future problems. First on the list are the joint headaches of supply chain disruption and a huge increase in shipping costs. But after that, investors will want to know why online sales hitting the streets weren’t enough for them either. “

Veteran Retail Analyst Nick Bubb said: “There is no sign that ABF wants Primark to go into e-commerce as they say” our confidence in Primark’s business model is unchanged, “although they admit that” There is no doubt that Primark, with its reliance on a highly efficient in-store retail model has been viewed as vulnerable to the pandemic. “


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