As high street competitors fall by the wayside, Primark enjoyed a 25% jump in sales in the Christmas trading period.
The value fashion group stood firmly in the winners’ circle to secure a share of contracted consumer spending, alongside online fashion retailer ASOS.
Releasing “outstanding” first-quarter sales figures, Primark boosted its value to almost £8 billion for owner Associated British Foods.
In the 16 weeks to January 5, Primark drove growth by “very strong” like-for-like sales, new store openings and “superior” sales densities in the larger new stores.
“Operating profit margin was higher than in the same period last year, reflecting not only the benefit, as expected, of lower cotton prices since last half-year, but also better trading,” said ABF.
Primark opened 14 new stores in the quarter: four in the UK, six in Spain, one in Germany and the Netherlands and its first two stores in Austria.
It has increased selling space by 1.1 million sq ft, or 14%, since the same time last year.
Graham Jones from analysts Panmure Gordon hailed Primark’s “stunning growth”.
He said: “The focus for investors, in our view, should be how to value Primark within the ABF group.
“Our sum-of-the-parts models assigns a value to Primark of £7.78bn, and drives an increase in our price target from 1,450p to 1,670p.
“Even after the stock’s strong run this implies a further 9.4% total return over the next 12 months, and in our view ABF should be a core holding in the sector.”
Meanwhie, ASOS was another big winner.
Sales at the online-only clothing store jumped 41% last month courtesy of a bumper UK showing in the Christmas party season.
ASOS retail sales for the month ended December 31 reached £78.1m, with the longer established British operation up a better-than-expected 34% and international sales up 47%.
It saw a 40% increase in orders dispatched in the month, to 2m, while the same growth was achieved in active online customers, which rose to 5.6m.
Sales in Britain reached £35.7m, while international revenues hit £42.4m.
business@thecourier.co.uk