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Primark sales rise 23% to give a boost to the UK clothing market

Press Release   •   Feb 25, 2013 15:16 GMT

Clothes retailer Primark has enjoyed an "outstanding performance" during the past few months, according to its owner Associated British Foods.

It expects total sales to be up 23% in six months to 2 March, while like-for-like sales - which strip out new store openings - are set to be 7% higher.

The UK clothing market, which includes women's, men's and children's clothes, as well as clothing accessories, was estimated to have increased by 3.3% in 2011, with sales reaching £43.1 billion. Women's garments accounted for the largest sector in terms of value, followed by men's and children's clothing.

With the UK economy and economies across Europe seeing weak or negative economic growth, Primark's focus on cheap clothing has proved to be popular among cash-strapped consumers.

The chain has been expanding rapidly. AB said that it had 15 new stories in the past six months, taking the total to 257. Its expansion into Europe includes six new stores in Spain, two in Germany, two in Austria and one in the Netherlands.

The clothing industry has, like most consumer markets, been affected by the recession and slow recovery thereafter. The tough economic conditions led to a decline in sales in 2009; however, growth has since been achieved, although the market is not believed to be reaching its full potential.

Notably this is due to the popularity of value, discount and grocery retailers' clothing collections, which remain sought after by cash-conscious consumers and on which retailers make little profit.

Primark is faring much better than rival UK clothing retailers. Over the crucial Christmas trading period, like-for-like sales at Marks and Spencer fell by 1.8%.

However, the 7% rise in like-for-like sales at Primark over the half-year implies a slowdown in recent sales as the chain had recorded a 9% increase in underlying sales during the first 16 weeks of the period.

The marketplace currently remains volatile for a number of competitors, which has resulted in many leading retailers entering administration. This is believed to be attributable not only to falling sales, but also to the popularity of out of town shopping parks and online retailers, as a number of high-street competitors in particular have struggled financially over recent months.

For more information on the UK clothing market, see the latest research: UK Clothing Market

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