Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

Its shops may have been closed for months over the past year or so, but Primark, owned by Associated British Foods (ABF) was never going to let the pandemic throw its expansion plans off track.

In recent days it has opened its first ever Czech Republic store, marking its arrival in its 14th country and making it its 396th store overall. And it comes hot on the heels of new openings Ljubljana in Slovenia and Primark’s two stores in Poland, in Warsaw and the newly opened Poznan.

Primark has also signed a lease to open its first store in Slovakia, and announced additional Polish stores in Krakow and Katowice, as well as a second store in the Czech Republic in Brno which will open next year.

Its Central Eastern Europe expansion, while bold, is not all it has in the pipeline. Work has also started to extend and refurbish its store at Luton’s The Mall shopping centre. Due to be completed this winter, the shop will have 35,500 square feet of retail space, increasing its shopping space by almost 40% and importantly - after months of shutdown - the building works will be phased to allow the store to remain open throughout the construction period.

After much debate outside the chain, and no doubt some conversations within its parent-company, about the wisdom of steadfastly refusing to join the online fashion pack, and sticking solely to in-store sales, the fast fashion chain has bolted out of lockdown with a clear aim of concreting its high street presence even more.

There is no denying that its reliance on solely in-store shopping was a sticking point with the world in lockdown. It saw sales fall by 41% year-on-year to £2.23 billion in the six-months to 27 February, equating to almost £1.5 billion in lost sales. As a result, Primark’s adjusted operating profit for the half-year period came in at £43 million, 90% down on the £441 million the year before.

For AB Foods as a whole, as a result of the majority of Primark’s stores being shut down in November through to February due to various lockdown restrictions across the world, half-year sales were down 17% year-on-year to £6.3 billion while adjusted operating profits fell 50% year-on-year to £319 million.

It also estimated that loss of sales amounted to £1.1 billion in the periods where its stores were closed, and like-for-likes were down 15% when stores were reopened due to Covid-19 restrictions.

However, AB Foods said it expected to be trading from 68% of selling space by the end of April.

The company had been helped in the UK by the government’s furlough scheme, but it has repaid the £121 million as sales have bounced back.

Speaking in April, just after non-essential retail had reopened in the UK, chairman Michael McLintock said: “Although uncertainty remains, a large proportion of the UK adult population has now been vaccinated and last week we saw the successful reopening of Primark’s English and Welsh stores which represent some 40% of our total retail selling space. On the assumption that our English and Welsh stores remain open, Primark will return to cash generation.”

Good news was also forthcoming for shareholders who saw the return of dividend pay outs after last year’s cancellations. Now all eyes will be on Thursday’s trading update to see what’s next in store for the fashion chain that has defied the odds and proof that sticking to its own style has paid off.

More on AB Foods (ABF)

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.

Share this article

Latest articles

Where next for Kingfisher shares as Screwfix-owner gives update?

Can the lockdown DIY frenzy sales boom persist in a re-opened world?


Emma-Lou Montgomery

Emma-Lou Montgomery

Fidelity International

Stop worrying about a crash: the bull market has further to run

Should investors really worry about inflation, Covid and US tapering?


Tom Stevenson

Tom Stevenson

Fidelity International

Where did UK consumers spend their money in August?

The UK ventured out last month as retail sales fell


Graham Smith

Graham Smith

Investment writer