Want the lowdown on European markets? In your inbox before the open, every day.

Sign up here.

Discount clothing chain Primark is sticking to its guns as a bricks-and-mortar retailer with plans to expand the store count by about a third while most rivals focus on e-commerce. 

Parent company

Associated British Foods Plc

said Tuesday it expects Primark to deliver much improved margin and profit this current fiscal year and announced a plan to raise the store total from 398 to 530 outlets over the next five years, with much of the expansion planned for the U.S. 

Primark is one of the few big clothing chains that has decided to forgo online sales, and now its pushing on with store expansion in its five newer markets: the U.S., Spain, Portugal, Italy and France. That made it particularly sensitive to lockdowns, losing 2 billion pounds ($2.7 billion) of sales last year when stores were closed. However, the chains rock-bottom prices allowed sales to recover quickly when shops reopened.  

The stock rose as much as 5.8%.  

Although Primark is not planning a transactional website, 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.

The chain aims to have 60 stores in the U.S. in five years, up from 13 now.

Solid growth in AB Foods other divisions, including grocery, agriculture, ingredients and sugar, in the year to Sept. 18 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 ABFs diversified model, Chief Executive Officer George Weston said in a phone interview. We are actually ending a year during a pandemic with more cash on the balance sheet than ever before.

The conglomerates sugar division outperformed, helped by a mix of strong volumes, higher prices in Europe and Africa and cost savings.

AB Foods said it is recording significant increases in energy, commodity and supply chain prices but is working to offset these with cost savings. It warned it could have to increase food prices in its grocery business, however.

    Before it’s here, it’s on the Bloomberg Terminal.

    LEARN MORE