Primark Will Open Up The Southeastern United States Market.

Associated British Foods PLC (ABF.L) Ying Lian food group (hereinafter referred to as ABF) disclosed its low price in today's interim report. Fast fashion brand Primark To achieve 5.5% profit growth, and expect profit growth in the second half of fiscal year can be accelerated by the improvement of gross margin.

According to the world clothing and shoe net, as of the first 24 weeks of March 2nd, the adjusted operating profit of Primark rose from 341 million pounds in the same period last year to 341 million pounds, accounting for 52.6% of the total profit of ABF 648 million. The adjusted operating margin decreased by 20 basis points to 9.8%, mainly due to the strong dollar increase in the first half of the year, and the discount rate was basically flat in the same period last year due to strict inventory control. ABF management expects better procurement practices in the second half of the year and the recent weakening of the US dollar will drive gross margins to rise. Today, the pound rose against the US dollar to the highest level since the referendum in June 2016.

In the first half of fiscal year, Primark income rose 7.9% to 3 billion 477 million pounds, and the fixed exchange rate rose by 7%. The growth was supported by 1 million 200 thousand square feet of sales increased by the expansion of 7 new stores and 3 stores in the past year, while the overall same store sales fell 1.5%.

ABF said that the abnormal warm weather in Europe last October and the widespread low temperature in northern Europe this spring weakened sales. As for inflation in Britain market Primark has attracted more consumer attitudes and become prudent customers with low price, thus gaining 3% of its same store sales and increasing its market share.

At present, all 8 American stores are concentrated in the northeast of Primark. Today, a plan to advance to the southeast is put forward. The location of Sawgrass Mills in Sunrise City, Florida, is expected to open before the end of 2019. The brand went to Boston for the first time in the non European market in October 2015. Next year's Florida store will be the tenth store in the United States, and the ninth store will visit Broolyn in New York next month.

Retailers who are invincible will often suffer if they enter the complex American market. Uniqlo UNIQLO, as early as 2006, has attempted to seize the huge market. Only now is it still struggling to explore feasible business models, repeatedly expanding, closing stores and adjusting the composition of commodities. However, it was still losing money until the first half of 2018. Primark also announced that it would reduce the size of the three stores by the end of 2017.

Craig Johnson, President of Customer Growth Partners, thinks that most of the Primark stores in the United States are located in shopping malls, and it is difficult to reach high street shops on weekdays. In addition, the brand takes a low price promotion policy, and its gross profit is limited. Its profitability basically depends on its large commercial area and high sales density.

ABF chief executive George Weston said at today's performance conference call that the performance of the US business is encouraging, while management is still aware of the market. They hope Florida new store can provide business experience in the retail environment with different shopping malls and geographical locations.

At the moment, the retail climate in the US is also conducive to Primark expansion. In order to reduce the vacancy rate promoted by the retailers' closing tide and bankrupt tide in the past two years, the mall operators will not hesitate to introduce Primark that can easily lead people to flow with preferential conditions.

By the end of the first half of this year, the brand has 352 stores in Europe and the United States, of which 184 are located in the British market. Although Primark refuses e-commerce, it is eager to embrace digital marketing. ABF pointed out in its earnings report that both digital channels and social media Primark fans have grown strongly.

Since Primark's overseas sales are sluggish and ABF's overall performance has been dragged down by sugar business, Associated British Foods PLC (ABF.L) has fallen by 20% since the beginning of November 2017, and the stock rose by 4.8% to 2706 pence on the 17 day.

More interesting reports, please pay attention to the world clothing shoes and hats net.