Despite a squeeze on profit margins caused by Brexit, Primark, the Irish clothing retailer operating in Austria, Belgium, France, Germany, Ireland, Portugal, Spain, the Netherlands, the United Kingdom, the United States and Italy, has said that it will continue to provide affordable fashion to the masses. Associated British Foods plc (ABF), the parent company of the bargain superstore has said that uncertainty around the pound following the results of the EU referendum meant that their profit has dropped. Many of the goods sold in Primark’s three-storey shop in Coventry’s Broadgate are brought from the United States after paying in dollars. A weak pound against the dollar means Primark’s buyers have to pay more for those goods.

Primark pays insurance against currency fluctuations when they order goods. ABF recorded that Primark’s sales for the financial year up to September 17 would be nine per cent higher than last year. However, the unseasonably warm weather last winter and a cold spring has caused a slight drop in some sales as clothing lines failed to match up to the unseasonable climate.

In a statement, ABF said, ‘The transactional impact on Primark’s margins from the weakening of sterling against the US dollar, particularly since the EU referendum, will have no effect in this financial year as a result of our practice of taking out forward currency contracts when garment purchase orders are placed. However, at the current exchange rates, margin will be adversely affected in the new financial year.’ ‘Primark is committed to leading the value sector of the market with its on-trend product offering and maintenance of its price leadership position in clothing,’ the statement continued.

While ABF has been working to ensure customers of Primark don’t feel the pinch caused by Brexit, its staff with pensions won’t be so lucky. A trading update issued by the company has claimed that pension deficit would be around £200million. The statement further explained that this was due to a decline in bond yields.