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Primark boosts UK market share, says Europe and US look strong

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A trading update from Primark owner Associated British Foods on Monday showed that the value fashion retailer is continuing to perform well, even if like-for-like sales are merely flat.

Primark remains one of the top performers in fashion retail, even though like-for-like sales are only flat – Photo: Sandra Halliday

Ahead of its next results statement, for the 24 weeks to February 29, ABF said Primark sales are expected to be up 4.2% at constant currency and 2.5% ahead at actual exchange rates, “driven by increased retail selling space and level like-for-like sales”. 

But with an expected decline in margin, operating profit should be “marginally” down on last year at constant currency and on a lease-adjusted basis. That said, on a reported basis, operating profit will be ahead of last year.

In the core UK market, the retailer said it delivered a further increase in our share of the total clothing, footwear and accessories market”. And sales there should be up 3% on the back of “a strong contribution from new selling space, partially offset by a 1.3% decline in like-for-like sales”. It said trading was “particularly good over November and December but weakened in January and February against very strong comparatives in the prior year”.

Mainland Europe did better though. Sales in the eurozone are expected to be 5.3% ahead at constant currency with particularly strong sales growth in France, Belgium and Italy. It said is new store in Milan “traded ahead of expectation and our store in Ljubljana, Slovenia continued to trade strongly”.

Like-for-like sales for the eurozone were up 0.5% due to “excellent like-for-like sales in France and Italy and, at this early stage, a notable improvement in Germany which was delivered through a series of operational changes made by the new management team”.

And of course, when the company issues trading statements or results reports, everyone’s always keen to hear how it’s doing in the US, which got off to something of a slow start several years ago. 

The company said that its business there “continued to perform strongly, delivering like-for-like sales growth, with particularly strong trading at the store in Brooklyn. Together with the contribution from planned store openings, we expect a much-improved operating result for the year”.

But as with all retailers, there are other issues to take into account than just sales performance. ABF pointed out that the average exchange rate for the British pound against its major trading currencies (other than the US dollar) was stronger in H1 than a year earlier and there will be a deficit on currency translation of around £6m. And in H2, with a higher contribution of overseas profits, that deficit will be bigger if current exchange rates continue.

The currency issues mean the margin was down in H1 as purchases this time were at a much stronger US dollar exchange rate, although “the effect was substantially mitigated by both reduced markdowns and reductions in the costs of goods, primarily lower materials prices”.

And then there’s the coronavirus, Covid 19, to take into account, although in the case of its superstar retail operations, the problem doesn’t seem to be large for ABF at present. Primark sources “a broad assortment” of its product from China and typically builds inventories in advance of Chinese New Year. That means it’s “well stocked with cover for several months and [we] do not expect any short-term impact,” it said. It added that it’s “working closely with our suppliers in China to assess the impact on their factories and supply chains and their ability to fulfil our current orders. If delays to factory production are prolonged, the risk of supply shortages on some lines increases. We are assessing a step-up in production from existing suppliers in other regions”.

Primark is expanding across Europe and the US – Photo: Sandra Halliday

Aside from concerns over margins and the supply chain, the company continued to expand its retail selling space in H1. This grew by 0.2m sq ft since its previous financial year-end and as of the end of this month, 375 stores will be trading from 15.8m sq ft, compared to 15.1m sq ft a year ago. 

Three new stores were opened in the period including Seville Lagoh in Spain, Kiel in Germany, and that Milan location in Italy. Selling space was reduced in two stores in Germany and a small store in Rathfarnham, Ireland was closed.

The programme will continue in 2020 and the firm should open 0.9m sq ft of new selling space in this financial year overall. A strong opening programme is planned for the next quarter, with a net 0.5m sq ft added. The new stores will open in in the UK, US, France (with four new stores), Italy, Belgium, Spain, Germany and Poland.

And as well as that Polish store (in Warsaw), there’s more activity going on in Eastern Europe with the company having signed leases for further openings in Poland, Slovakia and the Czech Republic.

Copyright © 2020 FashionNetwork.com All rights reserved.



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These Brands Are Giving Away Product to Medical Professionals at the Front Lines of the Pandemic

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Universal Standard Free Foundation Campaign

Fashion and beauty brands are mobilizing to respond to the Covid-19 pandemic in different ways. Some are donating money to different organizations and efforts to fight the coronavirus. Others are pivoting production to manufacture essential supplies for healthcare workers, like face masks, protective gowns and hand sanitizer. As the disease continues to spread, many companies have announced they’d be giving away products to medical professionals and others working to provide aid to those affected, as a token of appreciation for their work — ranging from shoes they can wear on long shifts to wedding gowns for upcoming nuptials. 

Aerosoles is donating some of its most comfortable sneaker styles to healthcare workers who e-mail sharethelove@aerosoles.com, while supplies last.





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Spanish designer dresses last brides as coronavirus halts weddings

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Wearing a surgical mask and latex gloves, Spanish wedding dress designer Inma Garcia cuts lengths of ivory satin and frothy net in her Barcelona workshop to make a bridal gown for a Mexican client.

Photo: Inmaculada Garcia

She is finishing the dress herself because her employees are in quarantine and her factory has been shut since March 16 after two workers tested positive for the coronavirus.

Spain, one of the countries worst-hit by the pandemic, is the second-biggest exporter of wedding dresses globally after China. A large proportion of the industry is centred in the Mediterranean city of Barcelona.

“We are trying to serve the brides who have not put off their weddings,” Garcia says, standing in a room with stacked bales of lace and sequin-embellished fabric. “We’ve come to make this dress to make sure the bride can happily get married.”

Garcia’s business has been hit on several fronts – weddings have been postponed, trade fairs where she makes most of her sales cancelled and the supply chains for the fine Italian fabrics she uses have ground to a halt.

“All our fabric orders are on hold. It’s not just that we don’t have workers, we don’t have any raw material with which to work,” she says. No new dress orders are coming in.

The sudden freeze on her business is emblematic of the paralysis sweeping Spain’s economy, where small companies account for nearly three-quarters of the labour market.

The government, like many around the world, has announced a multi-billion-euro package of measures to help the economy weather the outbreak like offering state-backed loans to businesses and paying benefits to furloughed employees.

But small businesses across the country are grappling with an unprecedented scale of disruption.

The Valmont Barcelona Bridal Fashion Week is one of the biggest events in the wedding industry calendar, bringing hundreds of buyers and brands from around the world to buy and sell. But the April date has been postponed to June.

“That’s where we make most of our sales for the whole year,” says Garcia, standing next to a rack of plastic-wrapped white gowns, trimmed with diamante and lace.

“We are keeping our expectations low on whether it will take place in June because countries are totally shut down.”

© Thomson Reuters 2020 All rights reserved.



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Best Bra and Cardigan Sets at Zara

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Lots of our favorite looks only feel right when we can wear them out for everyone to see, but nonetheless, I’ve devoted a small portion of my wardrobe to items I’ve never planned on wearing out of the house. (I think we’re calling them inside clothes.) There’s a distinct pleasure in dressing only to suit the microclimate of your home, where one doesn’t need to think about outerwear, or shoes, or, well, anything too functional. So, if Katie Holmes’s internet-famous bralette-and-cardigan moment never struck you as practical clothing for your regular life, maybe it’s just the thing to perk up your #StayHome look.

Since Katie first debuted the look, the trend has spilled into the market, giving us iterations to test-drive in our own homes. I’ve worn the look with jeans, but will admit that throwing it on as an alternative to my typical loungewear (read: sweatshirt and sweatpants) has provided the mood-boosting effects I was seeking in getting dressed, without committing to full-on clothes. It’s the happy compromise, if you will. It’s trend-forward, sure, but it’s cozy and comfy and looks especially cute styled with knit shorts and socks for hanging on the couch, a stay-at-home date night, or day spent working from bed. Plus, when it’s time to meet your pals in person again, you might just be ready to take the trend to the street, and be glad you have a cute cardigan — instead of a lineup of worn sweatshirts — on hand.





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