Primark's annual profits are up by 44%

Marks & Spencer's high street rival Primark hailed an "outstanding year" after its annual profits jumped by 44% to £514 million

Primark
Primark

Marks & Spencer's high street rival Primark hailed an "outstanding year" after its annual profits jumped by 44% to £514 million.

The retailer, which has 161 of its 257 stores in the UK, grew sales by 22% to £4.3 billion in the year to September 30, driven by the addition of new space and like-for-like growth of 5%. Associated British Foods, which owns Primark as well as leading food brands Twinings and Kingsmill, said it expected another improvement in the retailer’s performance in the current financial year.

In contrast to the struggles of M&S as it tries to kickstart its clothing sales, AB Foods paid tribute to Primark’s buying teams after autumn/winter and spring/summer ranges sold out with little discount.

Primark’s expansion in the UK has been focused on increasing selling space in major cities, with the opening of its second store on London’s Oxford Street and extensions to shops in Newcastle and Manchester.

The company expects to add more than a million square feet of space in the current year, including its first store in France, which will open in Marseille.

It said its new store formats provided an “exciting, fashionable and fun shopping experience”.

The company added: “Strategically-placed mannequins help to inspire customers to choose outfits that are readily available on adjacent fixtures, and prominent signage and wider aisles enable easy navigation through the store.

“We are also enhancing customer service by providing a higher ratio of fitting rooms and cash registers to ensure a smoother experience when trying on outfits and paying for them.”

In April, a building in Bangladesh occupied on one of its floors by a Primark supplier collapsed, killing more than 1,100 people. The retailer has committed to provide long-term financial compensation to victims and said it was the first UK brand to sign an accord aimed at ensuring sustainable improvements to working conditions in the country’s garment industry

Meanwhile Marks & Spencer said its fashion turnaround needs more time after slumping to its ninth back-to-back quarter of falling clothing and homeware sales.

The retailer’s like-for-like general merchandise sales dropped 1.3% between July and September on a year earlier, as a revamp of its autumn/winter clothing range failed to ignite trading. Heavy discounting and the cost of the star-studded womenswear overhaul helped drag underlying pre-tax profits 8.9% lower to £261.6 million during the 26 weeks to the end of September.

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