Primark, SuperGroup Plan International Expansion

By Tapan Panchal

LONDON--Two of U.K.'s leading clothing chains, Primark and SuperGroup, announced plans to expand their global reach to grow earnings.

The parent company of Primark said Thursday the retailer will enter Italy, its tenth European market, by summer of next year.

Associated British Foods PLC (ABF.LN) said the fast fashion clothing chain will continue with its European expansion by opening up to three stores in the country. The first store is schedule to open in a new shopping centre in Arese, northwest of Milan, in the summer of 2016.

Primark is also in advanced preparations to enter the U.S. market this September by opening a store in Boston, Massachusetts, AB Foods said. The chain first announced its U.S. entry in April 2014.

For 16 weeks to June 30, Primark recorded flat same-store sales growth against very strong comparatives. It currently generates more than half of AB Foods' annual profits.

"All-in-all, Primark remains a firm retail business with lots of potential for international expansion and a winning fashion formula that sees its cut-price clothing warmly received in all new territories," Anusha Couttigane, a consultant at retail research agency Conlumino said.

Barclays analysts said that the Italian entry serves as a reminder of Primark's roll-out potential.

Separately, clothing retailer SuperGroup PLC (SGP.LN) announced plans to enter the Chinese market.

SuperGroup, the owner of the Superdry clothing brand, expects first stores in China to open in late spring or early summer of next year. It has inked a joint venture with Chinese clothing company Trendy International Group to enter the market.

"The [Chinese] market is due to overtake the U.S. as the largest apparel market in the world and we're seeing Chinese consumer tastes changing to really focus on Western brands so we really think SuperGroup and the Superdry brand fit well into that market," SuperGroup Chief Executive Euan Sutherland said on a conference call.

AB Foods shares had added 6% to trade at 3,111 pence apiece, while SuperGroup shares were up 5.3% at 1,307 pence in early afternoon trading in London.

Jana Simmons contributed to the article.

Write to Tapan Panchal at [e-mail]

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