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| Primark blames freak December weather for flat sales figures | Primark blames freak December weather for flat sales figures |
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| Primark was a surprise loser on the high street over Christmas, with sales at its core UK stores down for the first time in nine years as warm and wet weather put a dampener on the cut-price chain’s profits. | Primark was a surprise loser on the high street over Christmas, with sales at its core UK stores down for the first time in nine years as warm and wet weather put a dampener on the cut-price chain’s profits. |
| Primark’s difficulties reflect the problems faced by several other big clothing retailers last month, as shoppers left knitwear, coats and winter boots on the shelves during the warmest December on record. Flooding and rain in parts of the country, a reluctance to spend time in town centres in the wake of November’s incidents in Paris, and the growing convenience and popularity of shopping online also kept people away from the high street. | Primark’s difficulties reflect the problems faced by several other big clothing retailers last month, as shoppers left knitwear, coats and winter boots on the shelves during the warmest December on record. Flooding and rain in parts of the country, a reluctance to spend time in town centres in the wake of November’s incidents in Paris, and the growing convenience and popularity of shopping online also kept people away from the high street. |
| Marks & Spencer’s sales of clothing and homeware at established stores plunged by 5.8% during the past three months, while Next lowered its profits guidance for the full year. Sales at Debenhams, meanwhile, rose as it stocked fewer coats and sold more perfume and beauty products, increasing online sales by 12%. | Marks & Spencer’s sales of clothing and homeware at established stores plunged by 5.8% during the past three months, while Next lowered its profits guidance for the full year. Sales at Debenhams, meanwhile, rose as it stocked fewer coats and sold more perfume and beauty products, increasing online sales by 12%. |
| Primark does not sell its clothes online and so is reliant on its stores. | Primark does not sell its clothes online and so is reliant on its stores. |
| John Bason, finance director of Primark’s parent company, Associated British Foods, said the number of shoppers visiting the clothing chain had not fallen but knitwear, coats and thermals had not sold well. | |
| “Christmas was a tough one and we can really point to the weather,” he said, adding that sales had been strong since the beginning of January as the weather had turned colder. | “Christmas was a tough one and we can really point to the weather,” he said, adding that sales had been strong since the beginning of January as the weather had turned colder. |
| He said that Primark, which ended an experiment with online selling because it found it could not do so profitably, was not considering a change of heart. | He said that Primark, which ended an experiment with online selling because it found it could not do so profitably, was not considering a change of heart. |
| Sales at the chain’s established stores across Europe were flat in the 16 weeks to 2 January, compared with the same period a year before, with growth in Spain and France and a better performance in Germany and Holland offset by a decline in the UK. Analysts had expected growth of 2%. | Sales at the chain’s established stores across Europe were flat in the 16 weeks to 2 January, compared with the same period a year before, with growth in Spain and France and a better performance in Germany and Holland offset by a decline in the UK. Analysts had expected growth of 2%. |
| Related: Primark owner says prices will not rise to pay for 'national living wage' | Related: Primark owner says prices will not rise to pay for 'national living wage' |
| Bason said there would be further expansion overseas: “There is a huge market in continental Europe that we are going after and we know when we go to new locations we are greeted with wide acclaim. That’s saying this model we’ve got has great sustainable growth for the forseeable future,” he said. | Bason said there would be further expansion overseas: “There is a huge market in continental Europe that we are going after and we know when we go to new locations we are greeted with wide acclaim. That’s saying this model we’ve got has great sustainable growth for the forseeable future,” he said. |
| Primark plans to open its second store in Italy by summer 2017 and is also expanding in the US, where it now has two stores open and plans to open 10. Bason said the third store was set to open the Danbury Fair mall in Connecticut in a few months’ time and the ninth site, at the American Dream shopping mall in New Jersey, had now been signed for. | Primark plans to open its second store in Italy by summer 2017 and is also expanding in the US, where it now has two stores open and plans to open 10. Bason said the third store was set to open the Danbury Fair mall in Connecticut in a few months’ time and the ninth site, at the American Dream shopping mall in New Jersey, had now been signed for. |
| The company said that sales had been strong in the first seven weeks of the period but had become weaker as a result of “warmer and wetter weather across Europe leading up to and over the Christmas period”. | The company said that sales had been strong in the first seven weeks of the period but had become weaker as a result of “warmer and wetter weather across Europe leading up to and over the Christmas period”. |
| Profit margins for the chain also fell as the weaker value of the pound against the dollar hit its buying power as it largely buys its stock in the US currency. | Profit margins for the chain also fell as the weaker value of the pound against the dollar hit its buying power as it largely buys its stock in the US currency. |
| ABF said the fall in margins at its clothing chain was lower than it had envisaged, as it had managed its stocks well and held back on discounting. However, the group said it continued to expect a “modest decline” in profits for the year. | ABF said the fall in margins at its clothing chain was lower than it had envisaged, as it had managed its stocks well and held back on discounting. However, the group said it continued to expect a “modest decline” in profits for the year. |