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Primark to bear the cotton price burden itself
17
Nov '10
Primark intends to retain its number one position in budget fashion business by giving up some of its profits, so as to not pass the burden of high cotton prices to its buyers.

As revealed by John Bason, Finance Director of Associated British Foods, which owns the retailer, there has been a considerable rise in Primark's profits during the January to September period this year, which has boosted the company's strength for next year. He added that, they expect to continue to be the best value provider on high street, and are ready to sacrifice some profits for the same.

Besides, Primark whose turnover grew by around 18 percent to £2.73 billion during the year, there has also been a large scale improvement in the overall performance of AB Foods' business, Bason said.

The hike in price of the commodity had a mixed effect on the holding company, as on one hand it is dealing with the rise in price of cotton at Primark, and on the other it is trying to push through the escalating prices of Kingsmill and other grocery items produced from wheat.

Primark's operating profits grew by 35 percent during the period under consideration and were recorded at £341 million, while its profit margins too expanded from 10.9 percent to 12.5 percent. The firm launched 13 new outlets this year, which includes three outlets in Spain, where Primark is trying to resist the recession with a sales growth of over 20 percent.

Fibre2fashion News Desk-India

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