Investors breathe sigh of relief on Primark trading
Primark joined the list of Christmas retail winners on Thursday after a bumper festive period, offering relief to investors spooked by a warning late last year.
The discount fashion brand’s finance chief John Bason said: “We’ve had a great Christmas, it’s as simple as that. It’s a testing time [for the High Street], but we’ve had good growth.”
Primark was buoyed by a spike in animal print clothes and teddy bear — or Borg — coats, Bason added. The retailer’s 4% rise in total sales in the quarter to January 5, was mostly down to new store openings. The growth was partly offset by a “modest decline” in same-store sales, it admitted.
But investors seemed pleased and shares in parent Associated British Foods rose 112p, or 5%, to 2290p. ABF spooked the City in November, saying there had been a dip in sales at Primark — one of the High Street’s most resilient names. Overall revenue for the group was up 1%.
Kate Ormrod, a retail analyst at GlobalData, said: “With many retailers seeking to exit physical space in 2019 and beyond, Primark has further opportunity to upgrade to better locations and extend its reach across the UK, aiding growth.”
In contrast, shares in peer N Brown, which owns brands Jacamo and Simply Be, were down 5.4p, or 5.3%, at 95.4p today. Sales fell 6% in its clothing businesses, partly offset by its finance arm, up 9.7% for the 18 weeks to January 5.
Although it still expects to make profits of £80 million in 2019, it admitted that it faces a bigger-than-anticipated bill from the taxman.
N Brown has been transitioning from a catalogue-focused business into a nimbler online retailer. It ousted chief executive Angela Spindler in September under new chairman Matt Davies.
