City store key to rise in profits

Apr 23 2008 by Tony McDonough, Liverpool Daily Post

PRIMARK owner Associated British Foods said “strong” trading at its new Liverpool city centre outlet was a key factor in its 5% profits rise.

The retail, food and agriculture group yesterday reported a rise in profits to £282m in the six months to March 1.

Primark, its budget clothing chain, has in the past few months overtaken Asda’s George as the number one value clothes retailer in the UK.

In September last year, the chain opened an 84,000 sq ft store in Church Street on the site of the Littlewoods store. More than 7,000 people applied for 859 jobs at the location.

It proved an immediate hit with Liverpool shoppers and for weeks after the opening barriers had to be erected outside to cope with the thousands of customers who turned up looking for bargains.

Primark also expanded in other UK cities and yesterday in his operating review, ABF chief executive George Weston said: “Primark grew rapidly during the year with a 37% increase in retail selling space since last year end.

“The last Littlewoods store has been refitted in Brighton in October. Significant new openings during the year were Oxford Street in London in April, and Liverpool in September, both of which have traded strongly.”

Revenues increased 25% at Primark during the six month period to £899m as the chain claimed 10% of the UK clothing market by volume.

AB – which is also behind food brands such as Kingsmill and Ryvita said its grocery, ingredients and agriculture divisions also contributed to the improvement in revenues.

However, the profits haul was held back by a sharp fall in profits at ABF’s sugar arm, which has suffered due to cuts in the EU sugar quota and adverse weather.

Yesterday's figures were in line with expectations, but shares fell as investors reacted to caution from chairman Martin Adamson.

He said: “The trading environments of many of our businesses are being affected by an unusual degree of economic uncertainty.

“Rising commodity prices and energy costs as well as volatile currencies affect our businesses directly and these and other economic factors impact on consumers.”

tonymcdonough