ECONOMY

Primark blames freak December weather for flat sales figures

Crish

The budget clothing chain has said shoppers failed to buy winter clothing in expected quantities over Christmas

Primark was not the only high street giant to be affected by a warm, wet December, with Marks & Spencer and Next also reporting poor sales
Primark was not the only high street giant to be affected by a warm, wet December, with Marks & Spencer and Next also reporting poor sales. Photograph: Arno Burgi/dpa/Corbis

Primark experienced a disappointing Christmas as warm, wet weather across Europe hit sales growth, it has announced.

Analysts said sales at the cut-price clothing chain’s established stores were flat in the 16 weeks to 2 January compared with the same period a year before. Analysts had expected growth of 2%.

Primark’s difficulties reflect problems for many clothing retailers ahead of Christmas, as shoppers left knitwear, coats and winter boots on the shelves during the warmest December on record. Flooding and rain in parts of the country, fears of terrorist attacks in the wake of last year’s incidents in Paris, and the growing convenience and popularity of buying online also kept shoppers away from the high street.

Marks & Spencer’s sales of clothing and homeware at established stores plunged by 5.8%over the past three months, while Next lowered its profits guidance for the full year. Sales at Debenhams rose as it stocked fewer coats and sold more perfume and beauty products, increasing online sales by 12%.

Primark does not sell its clothes online and so is reliant on its stores.

The company said that sales had been strong in the first seven weeks of the period but had become weaker as a result of “warmer and wetter weather across Europe leading up to and over the Christmas period”.

Primark’s parent company Associated British Foods said the fall in margins at its clothing chain was lower than it had initially envisaged, as it had managed its stocks well and held back on discounting.

However, the group said it continued to expect a “modest decline” in profits for the year.

Profit margins for the chain also fell as the weaker value of the pound against the dollar hit its buying power as it largely buys its stock in the US currency.

Primark’s parent company Associated British Foods said the fall in margins at its clothing chain was lower than it had initially envisaged, as it had managed its stocks well and held back on discounting.

However, the group said it continued to expect a “modest decline” in profits for the year.

 

[Source:- the gurdian]