Cut-price fast-fashion retailer Primark is eyeing an ambitious US expansion, opening stores across southern states like Texas and Florida

• European fast-fashion retailer Primark on Monday announced expansion plans for the US.
• It will open new stores across the South, including Texas, "anchored" to a new warehouse in Florida.
• Primark said "local, less-affluent, Hispanic" shoppers were one of its main Florida customer bases.

Cut-price European fast-fashion retailer Primark plans to expand massively in the south of the US.

Primark's parent company, Associated British Foods, said in its earnings on Monday that Primark was planning to establish "a significant presence" in the southern states.

It said that in the coming months it expected to sign leases for stores across the South, including in Texas. The new stores will be "anchored" by a distribution center the company is currently building in Jacksonville, Florida, its second in the US, Associated British Foods CEO George Weston said during the first-half earnings call.

"We're got a customer base, we've got a model, we've got an increasingly-stable team, it's been time for a while to put our foot down on accelerate," Weston said.

Primark currently has 17 stores in the US, with most in New York and around New England. Primark said in late 2021 that it planned to bring its total US store count to 60 by 2027.

Since last September, Primark has opened four new stores in New York and has four more planned to open by this September: two in New York state, two in New Jersey, and one in Maryland. It has also signed leases to open stores in Orlando, Florida and Jersey City, New Jersey.

The first shopper in the line for the Buffalo store's opening was from Canada, "and we think there's going to be a nice trans-border trade" into that store," Weston said.

Weston said that Primark was targeting the South with its expansion plans because of the lower store opening costs as well as the strong performance of the chain's first Florida store.

"The first Florida store has shown us that we're relevant in that market," Weston told investors. He said that its customers came from two main groups: Tourists and "local, less-affluent, Hispanic" shoppers.

"That's one of the customer segments we think we appeal to in particular," he said.

Speaking about Primark's decision to open its first Texas store, Weston said: "Whatever our prejudices might lead us to think, actually they dress very similarly to how Americans dress in many of our other US markets."

Primark doesn't sell clothes online, but is expanding its click-and-collect service in the UK. In the coming months, it is also launching its revamped website in the US, which includes features like the ability to check whether items are in stock before you visit a store.

Total US sales for the 24 weeks ended 4 March 2023 were 11% higher than the previous year.

Primark is expanding globally amid strong sales

Primark isn't just expanding in the US. It opened 13 new stores globally in the first half and said it was on track to have expanded its total retail floor space by around 6% in the year to September. Its new stores are performing particularly well, it said.

Global sales were up 19% in the half year to £4.23 billion ($5.26 billion), which Primark attributed to both higher prices and an increase in unit volumes.

Primark said that it was only introducing "moderate" price increases this financial year because of high inflation "and the likelihood of much reduced disposable incomes for our customers." It said that this didn't cover the higher input costs, causing margins to fall.

Primark said that strong trading in the UK in November and December led to "two record sales weeks" in the run-up to the holidays. It said that more people have been visiting stores and visits to its destination city stores are particularly strong as tourists and office workers return. Beachwear and luggage sales are particularly high, it added.

Primark said that in the second half of its financial year it expected to see the benefits of lower sea freight costs and "much reduced energy costs," though its overheads will include increases in staff wages and investment in technology.

As of March 4, Primark had 419 stores globally, with nearly half in the UK.