Primark and JJB Sports defy jitters on high street
Friday 09 July 2010
Two of the high street's biggest chains reported sharp jumps in sales yesterday, providing further evidence of resilient consumer spending.
Trading at Primark, the discount fashion chain owned by Associated British Foods (ABF), continued to power ahead in the third quarter.
The sports equipment retailer JJB Sports also revealed it had managed to put last year's troubles and a miserable World Cup for England behind it as it reported soaring early summer sales and margins.
Primark's sales surged 15 per cent rise in the 16 weeks to 19 June. John Bason, the finance director at ABF, said: "[Our business in] Spain is growing very strongly and the UK continues to be a growth engine for us." He declined to reveal Primark's like-for-like sales but Graham Jones, an analyst at Panmure Gordon, estimated the increase over the 16 weeks to be 7 per cent.
Primark which has 198 branches, said it had enjoyed particularly strong sales of long floral dresses, accessories and footwear. Mr Bason said: "The printed maxi dresses for £9 are doing very well."
Despite its continued growth, Primark said it was cautious about spending by customers in Europe in 2011, and warned that inflationary pressures in its supply chain might push up prices from this autumn. However, it said rising sales volumes were more than offsetting higher freight charges and the adverse effect of currency fluctuations on supply costs. It said its operating margins had been strong and its full-year margin was expected to be ahead of last year's.
Mr Bason confirmed that Primark, which also has shops in Portugal, the Netherlands, Belgium, Germany and Ireland, would expand into Austria next year. It is thought to be looking for sites around the capital, Vienna.
Elsewhere, JJB Sports, which came close to collapse last year, said its underlying sales jumped by 22.3 per cent in the six weeks to 4 July, although its trading figures for the same period in 2009 were dire. It added: "Sales for the company have continued in line with expectations, not withstanding England's premature exit from the World Cup."
JJB's cumulative like-for-like sales have risen by 12.1 per cent since 1 February. Over the same period, its gross margin rose 7.3 per cent to 43.8 per cent.
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