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Primark revenues up five per cent

UK retailers Primark’s revenues rose five per cent in September 17 while pre-tax profit soared 47 per cent. Primark is owned by the food and retail giant Associated British Foods. The huge jump in earnings was down to a favorable comparison with the year before, when ABF was hit by a number of exceptional costs and other one-off charges. Stripping these out, adjusted profits rose five per cent.

Primark’s sales climbed 11 per cent as it opened 22 stores in the year, although like-for-like sales, which exclude store openings and closures, fell. Fast-selling items last year included bomber jackets, while this autumn denim jackets, colored skinny jeans and striped dresses were fast moving.

The plan is to open a further 25 Primark stores next year in the UK, Europe, and three in the US. The devaluation of the sterling will hit Primark’s UK sales next year because it sources goods in dollars. The retailer will not, however, pass this on to consumers, and will instead take a significant margin hit, which will affect profits. The company’s food supply chains are short and do not involve crossing euro-sterling boundaries.

The devaluation of the pound should help ABF’s manufacturing business, such as sugar and muesli, allowing it to replace cheap imported goods with its own products and to build export markets.

 

 
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