Primark has hinted that it is unlikely to continue its online partnership with Asos.
George Weston, chief executive of Associated British Foods, Primark’s parent company, said: “The trial has ended and we are exploring our options, but as you imagine, the margins are so small that it can be difficult to sell a £3 t-shirt when you’re spending the same amount just to ship it."
“The shipping costs for an online business is the key reason why online-only retailers can’t compete with us”.
The budget fashion retailer saw revenues rise 22 per cent to £4.27 billion in the year to September, with underlying profits up 44 per cent to £514 million.
This is in stark contrast to high-end rival Marks & Spencer, whose fashion sales have been on a steady decline for the past two years despite a fresh effort with its ‘Best of British’ collection this year.
Sales at Primark meanwhile were up 5 per cent on a like-for-like basis.
The retailer has also seen revenue generated through its European expansion effort, where 19 stores have opened this year. A further 20 store openings are planned for 2014.
Weston added that Primark will not be launching an e-commerce operation anytime soon, however, stating that customers would rather travel to their stores.
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