Penneys leaves rivals in shade as sales rocket
Shares in Penneys owner Associated British Foods (ABF) soared over 5pc at one point yesterday after the group said sales at its budget clothing chain surged in the last quarter.
ABF said that sales at Primark, which is headquartered in Dublin and trades as Penneys here, rose 20pc in the 16 weeks to June 22, and by 22pc in the 40 weeks to the same date.
It said the jump in revenue was driven by continued expansion of the chain throughout Europe and improved like-for-like sales. There are now 257 Primark outlets and the chain is expanding across Europe.
ABF added that while Primark's sales growth had been subdued in March and April during what were very cold months, there has been a "marked improvement" as better weather took hold in May and June.
The Primark chain has proven to be enormously popular across Europe, but its cheap and cheerful image was tarnished in April after a devastating fire at a factory in Bangladesh where more than 1,000 people were killed. Primark and other fashion labels used the factory to make their garments. Primark quickly moved to compensate workers and provide food and assistance to affected families.
"We were deeply saddened by the tragic events caused by the building collapse at Rana Plaza in Bangladesh in April where one of Primark's suppliers was located on the second floor," ABF said yesterday. "We donated food to some 1,300 families shortly after the event and we have already paid short-term financial compensation to more than 3,300 workers in the building, irrespective of their employer. Primark has committed to long-term compensation for victims who worked for its supplier, and their dependents."
ABF, whose interests span groceries, sugar production, clothing and agricultural products, is controlled by the Weston family, who also own high end retailers Brown Thomas and Selfridges.
Its total group sales rose 8pc in the 16 weeks to June 22, with sugar sales having slumped 15pc. Grocery sales – it owns brands such as Kingsmill and Ryvita – rose 7pc in the period, while agricultural product sales jumped 18pc.
"The group remains on track to make good progress in adjusted earnings per share for the full year in line with expectation," said ABF.