Sales at Penneys stores last year fell by 13 per cent to €482 million while profits fell 70 per cent following the impact of Covid lockdowns in 2021, as the retailer broke out its Irish trading results for the first time due to new accounting rules.
New accounts filed for Primark’s main trading entity in Ireland, Primark Limited, also reveal that its parent group, Associated British Foods (ABF), has taken €475 million in cash dividends so far this financial year from the Irish operation. It has also repaid the Covid financial supports it received from the State.
The Irish market is the only one where Dublin-based Primark operates under the Penneys brand. Primark, which operates 37 Penneys stores here, said it plans to increase the trading floor space of its Irish operations by 20 per cent and will invest €250 million in its Irish operation over the next 10 years. It said the investment will result in 700 new jobs in the next three years.
Its current Irish investment projects include new stores or revamps of existing stores at locations including Tallaght, where it is due to open this autumn; Carlow, where it has relocated its store in the town to a new location; Cork where it is investing €60 million in an overhaul of its Patrick Street branch; and Galway, where it is investing €20 million in its Eyre Square outlet. Primark is also investing €75 million in a new logistics hub in Newbridge, Co Kildare.
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Internationally, the directors confirm in the accounts that the wider Primark group remains committed to expansion in the US, where it plans to reach 60 stores in the next five years. It also plans to continue European expansion, with new markets set to include Romania and Slovakia.
The Irish operation’s accounts, covering the 12 months to the middle of September 2021, also include intercompany revenues from franchise fees and inventory management services. Overall, including these services as well as the Irish stores’ turnover, sales last year were €2.36 billion.
Primark Limited posted profits before tax for the year of €18.9 million, down from €63.3 million the prior year. Its accumulated profits in Ireland stand at more than €1.3 billion, while it employs almost 6,300 staff here, including more than 3,500 part-time workers.
The company is the latest retailer in Ireland that, while it traditionally shielded from view most of its financial details, has recently moved to break out its local performance in publicly available accounts. Other retailers, including Aldi, have also made similar moves, due to to accounting rules for businesses that are closely linked to British head offices and Brexit.
The numbers in the 2021 accounts suggest that, prior to the pandemic, Penneys’ Irish retail revenues were close to, or possibly exceeded, €600 million annually.
The comparative sales figure of €554.4 million for the 12 months to the middle of September 2020 would have included the first Covid lockdown in the spring and early summer of that year, which would have dented sales. Penneys does not do online sales, relying instead on in-person purchases at its outlets.
