By Geoff Percival
Dublin-headquartered discount clothing retailer Primark — which trades here as Penneys — is to stick with a cautious US expansion plan, with it set to adapt existing stores rather than open many more.
Primark said it has been encouraged by sales at two US stores which it has shrunk and revamped in New Jersey and Connecticut.
The chain will open a store in Brooklyn this year, bringing the total number of US outlets to nine.
Primark opened its first US store in Boston almost three years ago.
“It’s not the time to be saying that we are going to open more aggressively,” John Bason, chief financial officer of Primark’s parent Associated British Foods (ABF) said.
“We are going to put a sensible investment into the US and make sure it works before investing more on the back of it,” he said.
Primark’s US business could be worth as much as £4.7bn (€5.3bn) if the company is able to successfully translate its fast-fashion model, according to Barclays analyst Alex Smith.
In its third quarter trading update, ABF said Primark’s sales in its year to-date are 6% up, year-on-year, on a constant currency basis and 7% ahead at actual exchange rates. It gained an extra 400,000 square feet in the third quarter, and opened seven new stores, including Munich in Germany, Metz in France, Antwerp in Belgium, Valencia in Spain, Tilburg in the Netherlands, Burnley in Lancashire and in the Westfield London shopping centre at White City.
Mr Bason said profit at Primark will be higher than expected this year after the chain began buying more garments from southeast Asia, where tariffs and production costs are lower than China.
Additional reportingBloomberg and PA