ABF boosted by Primark expansion, sales growth

15 January 2010

LONDON: Primark, the budget fashion chain, registered a 19% sales increase over the four final months of 2009, pushing up revenues for owner Associated British Foods (ABF).

Sales for the retailer, which operates 196 stores across Europe, were particularly strong in the UK and Spain, as recession-hit customers prioritised value in their clothes buying.

Growth has been boosted by the chain's corporate expansion during 2009, with new stores being opened in Porto and Frankfurt over the year.

However, Primark's Irish operations suffered a decline in sales, due to the particularly harsh recession faced by the nation.

ABF's overall revenues rose by 17%, with its grocery business, which includes Ovaltine, Kingsmill bread and Twinings tea, also reporting a 4% sales rise.

The group's sugar revenues also rose by 23% over the four-month period, thanks to an unusually high-yielding harvest in the UK.

John Bason, finance director of ABF, said: "A lot of retailers have come out with good trading over Christmas this year, but the thing that marks Primark out from the pack is that we had a good performance last year.

"So we've got an excellent performance followed by an excellent performance."

Warren Ackerman, an analyst at Evolution Securities, added: "We have rarely heard ABF's chief financial officer so upbeat."

Data sourced from the Financial Times/Press Association; additional content by Warc staff