For the first time in past 10 years, Primark, the Dublin, Ireland-based discount fashion chain, has registered a drop in its profits, in spite of new outlets helping it to boost its sales.
The retailer's adjusted operating profits dropped by eight percent to £309 million through the year till September 17. This fall in profits was mainly attributable to sluggish fundamental sales growth and high cotton prices which led to a 2.3 percent drop in its operating profits.
The fashion chain which operates 226 outlets in countries like Germany, UK and Spain stated that it opted to cut down its profits rather than increase the prices to meet rising cost of inflation, particularly in cotton prices.
The launch of 11 new Primark outlets in different parts of Europe helped the retailer to increase its revenues by 13 percent to £304 billion, while its sales grew by three percent. Over the past two years, the overall sales of the retailer have gone up by 25 percent.
The fashion chain owned by the multinational firm Associated British Foods (ABF) said it has met a whooping start at its pioneering menswear concession at the upmarket department outlet in Selfridges.
Primark intends to open a new outlet in Edinburgh before Christmas this year, and also new stores are slated for launch next year on London's Oxford Street and in Berlin.
Fibre2fashion News Desk - India
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