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Author: Alan LittleDate: 2021-11-10

ABF (ABF) + 7.5% on retailer Primark’s plans for 100+ new stores

Primark said that its sales rebounded on Tuesday as it set out plans to open new stores in the US and across Europe, and owner ABF (ABF) climbed 7.5% in trading.

Fast-fashion retailer Primark has set out ambitious expansion plans after delivering solid sales during the latest trading period in the news that sent its owner, Associated British Foods PLC (ABF), 7.5% higher in London on Tuesday.

Primark lost around £2bn in sales last year following the closure of stores during the pandemic and the absence of an alternative revenue stream online. Still, its latest report shows it has bounced back from adversity.

During the 12 months to 31st September 2021, Primark said that its operating profit had climbed 15% from the year before to £415m. The revenue generated had now made up for the pandemic-induced multi-billion-pound shortfall.

As the latest period covered the winter months spent in lockdown in the UK, Primark said it that lost around 33% of trading days, and that while sales were strong overall, they were still 12% down on 2019 levels.

Primark said on Tuesday that over 100 new stores are set to open in the US and across Europe by 2026 to push its total physical footprint to 530 locations.

While Primark is betting on a return to in-store shopping, some analysts are still baffled as to why the retailer refuses to create an e-commerce platform like many of its rivals.

Freetrade senior analyst Dan Lane said: “You have to ask why on earth Primark is refusing to keep up with the times.”

Primark has been adamant that having only physical stores is better for margins due its low-cost offerings.

AJ Bell investment director Russ Mould was more positive, noting that management had used the time to “improve the in-store experience”.

ABF shares jumped 7.5% in trading to 1,998p on Tuesday afternoon.

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