Fast-growing budget fashion retailer Primark plans to open its first shop in Italy next year, expanding into its tenth European market, its owner Associated British Foods said today.
Primark contributes over half of AB Foods' annual profit and trades as Penneys here.
AB Foods said it intends to open up to three Primark stores in Italy, the first in early summer 2016 in a new shopping centre in Arese, northwest of Milan.
AB Foods' finance director John Bason said Italy was attractive because it is the second biggest market for clothing by value in the European Union after Germany.
"The research that we've done would indicate that there is a very good market in Italy for the Primark concept," he told Reuters.
Primark's entry into France 18 months ago has been its most successful so far, said Bason, giving the firm encouragement to give Italy a go.
He added Primark's planned entry into the US was on track, with a first store due to open in Boston in September.
The company also updated on its trading today and said it was maintaining current year guidance.
AB Foods said it expects a modest decline in group adjusted earnings per share in the 2014-15 year from the 104.1 pence made in the previous year. Analysts are on average forecasting 98.3 pence, according to Reuters data.
The expected decline partly reflects movements in foreign exchange rates which have mainly affected the translation of overseas results into sterling, the full year impact of which is expected to be about £25m if current rates persist.
A bigger currency hit is anticipated in the 2015-16 year.
AB Foods said its revenue for the 40 weeks to June 20 was up 2% on a constant currency basis and level at actual exchange rates.
Primark's sales were 13% higher on a constant currency basis and up 9% at actual rates. Sales at stores open over a year were level with the previous year.
For the full year, the group said it expects progress at Primark and at its grocery, ingredients and agriculture businesses, offset by a large reduction in profit at AB Sugar.
