Primark has announced ambitious plans to crack America's retail market as the value chain steps up its international expansion.
The retailer, which also reported a 26 per cent jump in first-half profits, is set to open its first 70,000 square-feet store in Boston by the end of next year and could have as many as half a dozen by 2016.
"We are looking at the north-east from Washington to Maine," said chief executive George Weston. "That’s a big market with a young population, great links to the UK and Ireland and, importantly, four fashion seasons a year."
Shares in Primark’s owner, Associated British Foods, jumped 9 per cent, or 250p, to 2972p, leaving it at the top of the FTSE 100.
Despite a history of UK retailers, including Tesco and Marks & Spencer, failing in the US, Weston said he was confident.
"We are already an international retailer operating in nine countries. We have earned the right to have a degree of confidence that this brand will travel. We are not cocky but we have done our research and there is a lot of knowledge of the area within Primark," he said.
He pointed out that Zara-owner Inditex and H&M, which are Primark’s main competitors across Europe, are already doing well in the US.
Weston said that, as with Primark in Germany and Spain, ranges would be “adapted” to suit the American market. He added that France, where Primark only opened its first store just before Christmas, had proved to be the group’s most successful new country launch.
Credit Suisse said the potential size of the north-east US market is around 50 million, which it said meant: "Primark’s total potential just got considerably bigger."
The retail chain’s 26 per cent rise in operating profits to £298 million in the first half helped to make up for the expected collapse in sugar profits for ABF from £162 million to £64 million. Sugar prices are falling sharply as the European sugar quota is unravelled and set to end in 2017.
Groceries, where ABF owns Twinings tea and Kingsmill bread, saw a strong upturn in profits from £96 million to £126 million. Headline pre-tax profits for the group rose 4% to £468 million.
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