Value fashion chain Primark continues to win new customers from rivals and has unveiled sales growth of more than 6%.
Strong sales of homewares, childrenswear, beauty products and licensed merchandise such as Beauty & the Beast and Harry Potter branded items all helped the cut-price chain put on a strong performance over the summer.
A 6%-7% rise in sales at established UK stores in the six months to September contributed to a 19% total rise in sales to £7.05bn for Primark in the year to the same date. Underlying operating profit climbed by 7% to £735m for the year – £150m more than the profit Marks & Spencer is expected to achieve this year.
The performance comes amid fears of a tough festive season looming on the high street after the British Retail Consortium revealed a 1% fall in like-for-like sales in October. John Lewis, Next and New Look have all recently reported poor trading.
Primark said it had a taken a bigger slice of the womenswear market in the UK despite a fall in sales in that category. George Weston, the chief executive of the chain’s owner, Associated British Foods, said the entire womenswear market had shrunk because fashion has fallen down shopping lists in favour of holidays, technology, eating out and even Netflix.
“Women’s fashion has been the most difficult area for the whole market but it looks like we have done better than most,” he said. He said part of the problem was the “athleisure” trend for cheap casual sporty clothing that requires few accessories.
Weston said October had been “quiet” as warmer weather had affected sales but that he was feeling “very bullish” about Primark’s Christmas ranges.
Weston said Primark still has no plans to sell online as it has increased market share across 10 different countries without doing so.
Primark’s strong growth was reported as New Look revealed an 8.4% fall in sales at its established UK stores as its new executive chairman Alistair McGeorge said the chain’s fashions had become “too young and edgy”.
The company fell to an underlying operating loss of £10.4m in the six months to 23 September, compared with a profit of £59.3m a year.
McGeorge said warm October weather and the uncertainty around Brexit were also not helping high street chains.
He predicted the fashion chain’s performance would not pick up until next year. McGeorge, who ran the company for three years until 2014 and has just rejoined, said the brand’s problems were “self-inflicted and it is only us that can fix it”.
“There are not that many people doing a great job for 30- and 40-year-old fashion-conscious women and there’s nothing to say we can’t get that sweet spot back again,” he said.
• Follow Guardian Business on Twitter at @BusinessDesk, or sign up to the daily Business Today email here.
