PRIMARK, the low-cost clothing retailer, is to open a flagship store on Oxford Street after acquiring the lease to the site of the former Allders store.

The 100,000 sq ft store will be Primark’s first in Central London and one of its largest outlets in the country.

Redevco, the landlord, planned to split the site into three after it took it back from Allders when the department store collapsed earlier this year.

However, Primark agreed last week to take the entire site, which was occupied by C&A, the Dutch department store, before Allders.

Redevco, which was advised on the deal by CB Richard Ellis, the property company, is in the process of refurbishing the former Allders store to give it a modern eight-metre-high glass frontage.

Work is expected to be completed by next September and Primark will probably open the store early in 2007.

Signing the lease to open a new major store comes after an incredible year for Primark in which it has consistently outperformed high street rivals, putting pressure on Debenhams, Bhs and Marks & Spencer.

The new Oxford Street store will pit Primark against its rivals on the country’s premier shopping street.

In the year to September 17, Primark’s like-for-like sales were up 9 per cent while many of its rivals experienced declining sales.

At the annual meeting of Primark’s parent company, Associated British Foods (ABF) yesterday, Martin Adamson, the chairman, told shareholders in London that trading this year was slightly ahead of last year’s level and that the group remained on track to report a modest improvement in full-year profits, despite higher energy prices.

Mr Adamson also said that the retailer, which is fast becoming the crown jewel in ABF’s suite of assets, continued to perform strongly in the run-up to the busy and crucial Christmas season.

Analysts expect ABF, which makes Ryvita crispbreads, Kingsmill bread and Twinings tea, to report a full-year profit before tax and amortisation of about £613 million this year, up from £590 million last year.

The expected profit rise comes despite a potentially devastating fire at a major Primark warehouse last month in which an estimated £50 million of stock was destroyed. Primark chartered a Boeing 747 to transport clothing from suppliers in Asia and the Middle East to meet demand.

Primark was able immediately to take control of an adjacent warehouse that was not damaged by the fire and moved quickly to replace lost stockpiles in the lead-up to the Christmas trading season. Itdelivered stock to each of its 122 stores in Britain within 36 hours of the fire.

The cost of the charter aircraft was covered by insurance, as was the cost of the clothing lost in the fire.

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