Primark’s Spain wing recorded €40.3 million in earnings, a 4% increase from the previous year. This growth was possible despite the 9% reduction in operational profit due to higher payments agreement with the franchise’s Ireland-based parent company.
Irish fast-fashion brand Primark has been making significant headway in its global expansion plans, reporting record-high turnovers in Spain in 2024. According to the annual accounts filed by Primark Tiendas SL with the Mercantile Register, the company reported earnings of €1.885 billion in the most recent financial year.
This 3.7% increase compared to the previous year is a record for the fashion chain in Spain. However, this is also the slowest growth since the pandemic, signalling a deceleration in revenue compared to the previous years.
Primark’s Spanish wing recorded €40.3 million in earnings, a 4% increase from the previous year. This growth was possible despite the 9% reduction in operational profit due to higher payments agreement with the franchise’s Ireland-based parent company.
In-store sales contributed most of the revenue, with sales climbing 7.2% to €1.576 billion, despite being a considerable drop from the 14.4% increase in 2023. Sales to other group companies, particularly in Ireland, dropped 13%. However, Primark’s in-store sales alone recorded a gross margin of 31.1%, a ten per cent increase compared to 2023.
Although overall sales have dropped, the Irish company was engaged in a massive expansion drive, having opened six new outlets in Spain in 2024. Four of the six stores were opened in the Community of Madrid, and the remaining two are in Melilla and Lorca. With over 7,000 employees, Primark operates 66 stores in Spain and is continuing its expansion ambitions.
In July, news broke that the fast-fashion company planned to open a new store in the Grancasa shopping centre in Zaragoza. This, in turn, was preceded by its April announcement that Primark would open a new store in Lugo, as part of its €100 million Spanish investment plan, which was unveiled in 2022.
The company, which was founded in 1969 in Dublin under the name Pennys, now operates in 17 countries across Europe and the US. With 460 outlets under its belt, Primark aims to own nearly 560 stores by the end of next year. Spain and Portugal are the company’s primary targets, as they account for 18% of the total sales.
Primark is now owned by Associated British Foods (ABF), and despite these promising figures, in September, company shares dropped over 10%, after it raised concerns over ‘consumer caution’ due to rising costs of living. According to George Weston, chief executive of ABF, market conditions are more challenging now as consumers are careful about spending money as inflation and unemployment worries loom.
Market analysts attributed this fall in share prices to shrinking sales. In the six months leading up to September, Primark’s total sales had increased just 1% and profits were thinning, which reflects the Eurozone’s sluggish economic conditions, as consumers remained cautious and competition from rival Chinese brands like Shein and Temu intensified.
While the situation in the EU is detrimental to sales, and reports suggest that rising inflation in the UK is bound to spread globally, the company seems to be optimistic about the situation in the US, as it plans to further increase its presence in the country. However, industry experts have maintained that this optimism could fade if US consumer spending shrinks as a result of rising unemployment.
Amid these concerns, Primark celebrated its 10th anniversary of setting up shop in the US last month. There are 33 stores across 13 states, including most recently in El Paso, Texas and Memphis, among others. The company announced that US shoppers have welcomed the brand with open arms, and leases for 18 additional outlets have already been signed.
This shows that despite tariff uncertainties and alarming growth margins, Primark views the US and parts of Europe as lucrative markets and remains enthusiastic about its growth expansion strategy in these regions.
