Primark overtakes rival Zara - and sets its sights on struggling Marks & Spencer
Primark owner Associated British Foods says its sale volumes have now overtaken arch rival Zara in its competitor’s Spanish home market.
The budget fashion chain, which said in a trading update that underlying annual sales should top 4.5 per cent, said Spanish trading has been exceptional, driven by low prices.
Primark, which has 278 stores selling the type of affordable fashions being modelled on the right, is likely to see full-year sales rise 17 per cent ahead of last year following a big international expansion drive.
Cheap clothes: Primark's success is being exported to the US, where it plans to open 10 stores by 2016
It also announced further plans to grow on the east coast of America following an earlier announcement that it would enter the market in Boston next year. It hopes to have ten outlets in a range of different shopping destinations, from indoor centres to department style stores, by 2016.
Analysts suggest that if Primark continues to grow at this rate it could follow Next in overtaking Marks & Spencer in Britain. Independent analyst Nick Bubb said: ‘The way things are going, M&S is soon going to be overtaken by Primark, with Primark set to make over £600m operating profits on sales of £5bn in the year about to finish.’ M&S made pre-tax profit of £622.9m in its last financial year.
Finance director John Bason said sales over the Christmas period were excellent and were boosted in the third quarter by warm weather especially in the spring and early summer.
He believes the business can succeed stateside, despite America being a graveyard for many UK retailers.
Despite this shares in ABF fell 5.23 per cent or 152p to 2757p after it warned low prices at its sugar business would drag down annual earnings for that division.
Bason said that its grocery and ingredients divisions had performed strongly buoyed by success of its Twinings tea brand where it is seen as a luxury product in some markets.
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