DISCOUNT fashion chain Primark has shaken off the high street blues to book bumper annual sales and profits, writes Scott Reid.
The retailer, with almost 200 stores, grew turnover by a fifth to £2.3 billion in the year to 12 September, proving its worth to parent company Associated British Foods. Operating profits hit £252 million, an increase of 8 per cent.
Primark – k
nown for its super-cheap clothing long before the arrival of the credit crunch – has benefited from strong expansion in the UK and Spain in recent years. During the 12-month period, it opened a dozen stores, but like-for-like revenues, which strip out the impact of new sites and additional selling space, still grew by 7 per cent.
The latest figures come two months after Arthur Ryan, who set up the business in 1969 and is in his early seventies, announced his intention to give up day-to-day running of the firm and become chairman. He is replaced by chief operating officer Paul Marchant, who has experience at several high street chains, including Debenhams and New Look.
The retailer used yesterday's results to defend itself against accusations that it exploits the overseas workers producing its clothes. It said its record on ethical trading was subject to close scrutiny and that it had contributed to industry-wide efforts to improve labour standards.
Last week, The Scotsman revealed Primark had put back plans to open up in Edinburgh until after Christmas. The firm said it was now planning to open up a site 30 per cent bigger than expected and was searching for suitable premises.
Parent AB Foods, which also owns Twinings, Ryvita and Kingsmill, posted underlying profits of £655m, an increase of 4 per cent on a year earlier.
But almost 400 UK jobs are likely to go over the next two years as the Twinings tea operation shifts much of its manufacturing focus overseas.
The firm said it was considering a move to close its North Shields tea packaging site in Northumberland in September 2011, with the loss of all 263 workers. Production for the UK market would be moved to a plant in Andover, Hampshire, where there would also be 129 potential job cuts.
