Primark beats blues in festive high street
PRIMARK reinforced its status as Associated British Foods’ jewel in the crown as it delivered bumper festive trading to counter souring sugar sales.
The fashion retailer, which does not sell online but has millions of followers on social media platforms, was boosted by store expansions and a strong performance in its fledgling American operation as it grew sales by 4 per cent from the previous year in the 16 weeks to January 5.
It bounced back from November, when shoppers stayed away from the high street, to increase sales at established UK stores by an estimated 3 per cent in December, exceeding expectations and growing its share of the clothing market “significantly”.
ABF finance chief John Bason said low prices and good demand for items such as animal print dresses had enabled it to cut back on discounting, while trading at the chain, which has a collaboration with TV presenter Stacey Solomon, had been positive so far this month.
He added: “Primark stores are fun and not down in the mouth with no money spent on them.
“People are out there to have fun rather than being on your own in your house looking at a computer.” Hargreaves Lansdown analyst Sophie Lund-Yates said: “ABF’s crown jewel is still Primark, and it’s still managing to shine through a pretty muddy high street environment.
“Positive sales growth is a feat many stores simply aren’t managing at the moment. Primark’s doing well to stand firm, especially because it doesn’t have an online presence to rely on like the others.”
Revenue at ABF’s sugar business was 12 per cent down due to lower EU sugar prices, although the company has seen “early signs of recovery”, while new product launches boosted sales at its grocery arm, which includes Twinings Ovaltine, by 3 per cent. ABF shares rose 152p to 2330p
Primark’s improving fortunes contrasted with a 6 per cent fall in product sales at Jacamo and Simply Be owner N Brown in the 18 weeks to January 5, sending its shares 12p lower to 89p.
The group, which is switching to becoming a digital retailer, described the peak trading period as “challenging and highly promotional”.