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MARK FAITHFULL

Following the

Money

Mark Faithfull crunches the numbers as he looks at
analysis and expansion that reflects changing markets.

Primark looks to the US for expansion
opportunities

The owner of fast-fashion retailer Primark expects group profits
to bounce back above pre-Covid-19 levels and is also forging ahead
with US expansion, with around a third of planned new openings in
North America.
Primark sales for the first half to 5 March are expected to be more
than 60 per cent ahead of last year, while the impact of the surging costs
of raw materials, and supply chain problems at its operation have been
mostly offset by cutting store operating costs and a favourable exchange
rate with the US dollar, the company said.
The company, which operates a network of over 400 stores,
including 191 in the UK, has added 27 stores over the past two years Ted Baker mulls future amid bids
and recently announced its first store in Romania, due to open later this
year in Bucharest, marking Primark’s 15th international market. Fashion retailer Ted Baker confirmed in late March that it had turned
It is also stepping up its US expansion with three new store locations in down no less than two proposals from US private equity firm Sycamore
the New York region and Primark now has five new leases signed in the Partners Management.
area, in addition to a new store lease for Tysons Corner, Washington, After what the company’s management described as a careful review
signed earlier in the year. of the offers, the group determined that the bids significantly undervalued
In the past financial year, almost a third of Primark’s new store openings the business and “failed to compensate shareholders for the significant
were in the US, including the most recent launch in September last year upside that can be delivered by Ted Baker as a listed company.”
at Fashion District, Philadelphia, its 13th store in the country. Primark At the time of writing, Sycamore was facing a decision as to whether
intends to accelerate expansion and over the next five years Primark it should come back with a higher bid before the mid-April deadline set
expects the US store estate to grow to some 60 stores. by the UK’s Takeover Panel or walk away, having previously outlined its
interest in a statement to the London Stock Exchange.
Ted Baker has been without a permanent chairman since the death of
John Barton, and has endured torrid times, with high profile management
resignations and Founder Ray Kelvin left under a cloud in 2019 amid
claims of inappropriate behaviour toward female colleagues.
More recently, the business has begun to show encouraging signs of a
recovery, with a recent trading update revealing that sales rose by 35 per
cent during the 12 weeks to 29 January compared with the same period
a year earlier.

Boots waits on suitors as Walgreens leads chase

Bidders for Walgreens-owned UK pharmacy and drugstore giant
Boots are preparing to take their bids further as they square up in a
battle for the high street group.
Current front-runners include the billionaire Issa brothers, owners of
supermarket chain Asda – a deal which they closed out from Walmart
last year - and EG Group, who are looking to add the chain of 2,200
stores to their rapidly growing retail empire.
The eventual winner will likely reshape the pharmacy and drugstore
markets in both the US and UK, with American giant Walgreens exiting
the Walgreens Boots Alliance (WBA) to focus on its home market,
while UK market leader Boots seeks new direction beyond its recent
era of mega-mergers.
For its part, Walgreens is shifting its focus toward primary healthcare.
The drugstore group has administered a colossal 56 million doses of
the Covid-19 vaccine over the past year and in the Autumn WBA Chief
Executive Roz Brewer unveiled the new Walgreens Health unit.
Central to this initiative is an expanded partnership with primary care
clinic specialist VillageMD – in which WBA invested a total of $6.2bn
across 2020 and 2021 to build up an ownership stake - to open Village
Medical at Walgreens clinics.
With 80 clinics across 10 markets already opened since their initial
50 RETAIL & LEISURE INTERNATIONAL NOVEMBER 2018 2019 pilot, the partners are aiming for 200 clinics by the end of this year,
increasing that to 600 by the end of 2025.