Primark is poised to break into the lucrative American market in its biggest move since opening stores in France last year
The owner of Primark is seeking to break into the lucrative American market which has been a graveyard for a host of British retailers.
Associated British Foods, which posted a 4 per cent rise in half-year underlying sales for its budget fashion chain, plans to open a series of stores in the north-east states.
Positive reaction to the announcement saw ABF shares rise yesterday to close 9 per cent or 240p higher, at 2962p.
Heading to the US: Shares in Primark went up after it announced plans to head to the US
The first store will open in a former department store in Boston next year, in what is Primark’s biggest move since breaking into France last year.
The retail chain, which has been successfully replicating its cut-price model across nine European countries, has been something of a phenomenon as shoppers snap up its fast fashion in the downturn.
Operating profit has jumped 26 per cent to £298million for the 24 weeks to March 1 as total sales rose 14 per cent.
Chief executive George Weston said he decided to expand into Boston following extensive research.
‘The area has 50million people and is the size of France with good links back into UK and Ireland,’ he said.
Weston added that he was confident Primark will be different and attractive to young American consumers, just as in Europe, and plans to learn about the specifics of the north-eastern market.
‘It is a good fashion market with the north-east the closest part of the States to Europe. Around 14 per cent of the population of the US live in this area and it accounts for 16 per cent of clothing sales,’ he said.
Apart from a common language there are few other similarities that migrate across the Atlantic.
In recent years this disparity has seen Tesco pull out of its Fresh & Easy venture, and both Sainsbury’s and Marks & Spencer aborted their stateside manoeuvres.
The success of Primark offset a poor performance at ABF’s struggling sugar business.
The firm, which also owns Twinings Tea, Ryvita and Silver Spoon, said operating profit in sugar slumped to £64million from £162million, reflecting lower sugar prices and lost contracts with retailers.
Group pre-tax profit grew to £434million from £411million on sales of £6.2billion.
Primark is one of the few retailers that has compensated the victims of last year’s Rana Plaza factory disaster in Bangladesh, which saw the death of 1,134 people who made clothes that were sold in western High Street stores.
Today is the first anniversary of the devastating fire, and to support British businesses, International Development Minister Alan Duncan announced the launch of a new database of Ready Made Garments factory inspections to help firms make informed choices about which factories they work with.
‘One year on, we all need to ask ourselves if we are doing everything we can, and this includes British businesses,’ he said.
‘They have the power to bring about profound and positive change, whether by paying into the compensation fund or making their supply chain even more transparent.’
Most watched Money videos
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Fiat pledges to cease grey car production as they launch new EV
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Land Rover unveil newest all-electric Range Rover SUV
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mail Online takes a tour of Gatwick's modern EV charging station
- Blue Whale fund manager on the best of the Magnificent 7
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- How YOU can cash in on the stock market 'feeding frenzy':...
- Kier Starmer and Rachel Reeves don't have that 'vision...
- Bungalow wars! Downsizers are in bidding battles against...
- Take That concert at Co-op Live has moved venue. Can I...
- BP profits hammered by lower energy prices
- Octopus Energy valuation grows to more than £7bn as...
- Retail sales hit by wet weather and early Easter bank...
- BUSINESS LIVE: BP profits slump 72%; Wayve raises more...
- I wanted to return £12,000 of wedding clothes from...
- Online trading platform Plus500 suffers fourth...
- MP condemn woke ESG debanking as 'legitimate' firms are...
- MARKET REPORT: Rate hopes send Footsie to another record...
- Big Four auditors fined £9m for the London Capital &...
- The 10-minute rule that could save you from a parking fine
- House prices flat in April says Halifax, but buyers seek...
- I'm dying of brain cancer at 39. But my insurance won't...
- Boost for City as BP vows to keep its London listing -...
- Saudi Aramco to pay £100bn dividend to help fund city of...