Discount UK clothing chain Primark plans US store expansion

Bloomberg

Discount clothing chain Primark is sticking to its guns as
a bricks-and-mortar retailer with plans to increase the store count by about a third, largely in the US, while most rivals focus on e-commerce.
Parent company Associated British Foods Plc said it aims to raise the store total to 530 worldwide over the next five years, from 398 currently.
Primark is planning a push in the US, a market has proved tough for British retailers to crack. The most notable failure in recent years was an attempt by Tesco Plc, Britain’s largest grocer, to open a chain called Fresh & Easy in California. The launch was troubled from the start and Tesco eventually exited the US in 2013.
AB Foods shares rose as much as 7.3% after the company said Primark should deliver a much improved margin and profit this current fiscal year.
Weston said Primark’s stores are working well in the midwest states and Florida in addition to the northeast, where it first entered the US. The chain now has 13 locations in that market and plans to have 60 there within the next five years.
Store expansion will also be focused on Spain, Portugal, Italy and France. The retailer is one of the few big clothing chains that has decided to forgo online sales. That made it particularly sensitive to lockdowns, losing 2 billion pounds ($2.7 billion) of sales last year when stores were closed. However, the chain’s rock-bottom prices allowed sales to recover quickly when shops reopened.
Although Primark is not planning to enter e-commerce, the chain is investing in upgrading its website to showcase more of the clothing range and provide customers with information on available stock levels in their local stores.
Solid growth in AB Foods’ other divisions, including grocery, agriculture, ingredients and sugar, in the year means the group will return 320 million pounds to shareholders in total via ordinary dividends and a special payout.
“These results illustrate the robustness of ABF’s diversified model,” Chief Executive Officer George Weston said.
“We are actually ending a year during a pandemic with more cash on the balance sheet than ever before.”