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| Primark sales hit by volatile weather | Primark sales hit by volatile weather |
| (about 1 hour later) | |
| Low-cost fashion retailer Primark is blaming unusual weather last winter and in the spring for weak sales. | Low-cost fashion retailer Primark is blaming unusual weather last winter and in the spring for weak sales. |
| It said unusually warm weather in the pre-Christmas period and a very cold March and April had depressed sales. | It said unusually warm weather in the pre-Christmas period and a very cold March and April had depressed sales. |
| The retailer expects like-for-like sales, which strips out sales at new stores, to fall 2% for the year to 17 September. | The retailer expects like-for-like sales, which strips out sales at new stores, to fall 2% for the year to 17 September. |
| Primark also said the previous year had been very strong, so it had been hard to improve on that performance. | Primark also said the previous year had been very strong, so it had been hard to improve on that performance. |
| Retail experts say the mild weather in the run-up to Christmas made shoppers think twice about buying new coats and jumpers. | |
| "If the weather's warm consumers make do with clothes from the previous year," said Maria Malone, principal lecturer for fashion business at Manchester Metropolitan University. | |
| For retailers like Primark that causes a problem as they source their clothes from the Far East and South Asia and cannot adjust their stock to reflect the weather conditions. | |
| "Once stock is on its way you can't turn the ships around," points out Ms Malone, so to clear their warehouses big retailers are forced to cut prices. | |
| Pound impact | Pound impact |
| Primark has opened 315 stores during the current financial year, including its first store in Italy and a flagship store in Spain, on Gran Via in Madrid. | Primark has opened 315 stores during the current financial year, including its first store in Italy and a flagship store in Spain, on Gran Via in Madrid. |
| Four stores were opened in the north east of the US, where the company said its brand had been "well received". | |
| Including the effect of those new store openings, Primark expects sales to be 9% ahead of the previous year. | Including the effect of those new store openings, Primark expects sales to be 9% ahead of the previous year. |
| The weakening of the pound has not so far affected Primark's results, but it warned that profit margins are likely to be hit next year. | The weakening of the pound has not so far affected Primark's results, but it warned that profit margins are likely to be hit next year. |
| However, it appears that Primark intends to shelter shoppers from the effect of the weakened pound - it said that it was "committed" to keeping prices low. | However, it appears that Primark intends to shelter shoppers from the effect of the weakened pound - it said that it was "committed" to keeping prices low. |
| Pension deficit | |
| Primark is owned by Associated British Foods (ABF), which releases its full results for the financial year on 8 November. | Primark is owned by Associated British Foods (ABF), which releases its full results for the financial year on 8 November. |
| Overall, the company said that its underlying profit was ahead of expectations and "marginally" better than last year. | Overall, the company said that its underlying profit was ahead of expectations and "marginally" better than last year. |
| But adverse conditions in the financial markets hit the company's UK pension scheme. ABF expects it to swing into a £200m deficit, compared with a small surplus in the previous year. | |
| As a result the company expects to pay more to service the scheme next year. The fund will have an official re-evaluation in 2017. | |
| ABF also owns British Sugar and a range of grocery brands, including Twinings, Ovaltine, Kingsmill bread and Dorset Cereals. | ABF also owns British Sugar and a range of grocery brands, including Twinings, Ovaltine, Kingsmill bread and Dorset Cereals. |