Primark bounces back as shoppers get back into fashion
Primark is bouncing back as its stores around the world reopen with the company saying on Thursday that all of its stores were operating by the end of the third quarter.
But in an update covering the 40 weeks to June 19, it said that Q3 still saw extensive restrictions on the movement of people and trading, and even with stores opening their doors again, some restrictions remained.
Yet the fact that it was able to record £1.6 billion in sales during the quarter — even without it operating a webstore as its peers do — shows just how popular its stores are. In the year to date, its total sales are down 11% at £3.837 billion, but the Q3 figure is actually a 207% rise compared to a year earlier when lockdowns were a big problem.
At the start of Q3 this year, the company was only able to trade from 22% of its retail selling space, although stores opened over the subsequent months.
It’s hard to get a true picture of trading given the complications of lockdowns for the comparison period a year ago and different sites not being allowed to open for parts of Q3. But looking at like-for-like sales on a two-year basis, they’re ahead by 3% in Q3.
The stores in the UK, Republic of Ireland, France and Italy delivered “very strong” increases, while the US was “marginally ahead”. However, like-for-like sales elsewhere in continental Europe were lower, “reflecting trading restrictions”.
The company said it saw pent-up demand in the early weeks after reopening that were “significantly better” than the performances after reopenings earlier in the pandemic. This was driven by higher customer footfall, an increase in basket sizes and a lower level of markdown as consumers clearly felt more confident that it was safe to shop in person.
But footfall and basket sizes “have declined from the peaks at reopening” overall, although in its strongest markets, “higher than pre-Covid basket sizes have continued and offset the lower footfall”.
Data for the wider UK clothing, footwear and accessories markets, which includes all channel and online sales, for the seven weeks after the reopening of stores, shows both value and volume share gains for Primark compared to the same period two years ago.
The company said that “the relevance and appeal of our value-for-money offering has been evidenced by the number of customers that have returned to shop in person in our stores, across every one of our markets, each time we have reopened post-lockdown”.
Importantly too (and further evidence that consumers think life will be back to normal soon) is that this reopening has also seen “a resurgence in demand for fashion across womenswear and menswear, as customers start to step out of lockdown leisurewear”.
There has been a “strong response” to its two hero womenswear ranges for spring/summer, Joyful Gelato and Garden Party, “with the pink gingham and purple blazers selling out within weeks supported by digital marketing”. Licence product has also performed very well with strong sales in its NBA-branded and children's gaming ranges, particularly in the US. Its new baby collection made a strong start too.
The company continued to open new stores in Q3 and is now trading from 396 stores and 16.8 million sq ft of retail selling space, which compares to 16 million sq ft a year ago. It added seven new stores in the third quarter in Chicago in the US, Poznan in Poland, Tamworth in the UK, Bilbao Gran Via in Spain, Rome Est in Italy, Prague Wenceslas Square in Czechia, and a flagship 80,000 sq ft store in Rotterdam Forum in the Netherlands.
Its new stores “have had a positive reception from customers with queues on opening day and very good sales”. It also has “a healthy pipeline of new stores and [is] looking forward to the opening of our 400th store this autumn”.
It will build on its entry this year into eastern Europe with more stores in Poland and Czechia, and its first store in Slovakia. It will also continue to expand in France, Spain, Portugal and Italy and it plans to “accelerate growth in the US”.
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