Fashion swing is felt by Penneys' owners
Primark stores' owner Associated British Foods posted a 24pc rise in third-quarter sales yesterday, but its shares dipped as its once fast-growing fashion store chain showed it was not immune to the consumer slowdown.
Primark, which trades as Penneys in Ireland, is headed up by Arthur Ryan. The original Penneys store was set up by Mr Ryan and his partner Micaela Mitchell in Mary Street, Dublin, in 1969.
Primark, which is Britain's second-biggest clothing retailer after Marks & Spencer in terms of sales volumes, achieved a 14pc rise in total third quarter sales. But that was almost entirely due to new stores, with analysts saying its underlying like-for-like sales slowed to near zero from 4pc growth at the half-year stage.
"The era of throwaway fashion appears to be coming to an end, and maybe the consumer is now buying less but trading up," said analyst Freddie George at brokers Seymour Pierce.
AB Foods, the food and retailing company 55pc-owned by the family of chief executive George Weston, said Primark's third-quarter like-for-like sales in the 16 weeks to June 21 were still positive but gave no figure. It said sales were hit by weak April trading due to poor weather in Britain.
"Our performance has been resilient, and we are performing very much better than the rest of the UK retail market, while we continue to go for growth with our new store openings," said AB Foods finance director John Bason.
Charlie Mills at Credit Suisse said Primark's third-quarter like-for-like sales were broadly flat, putting annual comparable sales on course for a 2pc to 3pc rise. That still compares favourably with M&S. (© Reuters)