Primark owner sees no risk from Brexit
Brexit holds no fears for Primark owner Associated British Foods, it declared today despite the fact almost half the fashion chain’s sales are now in Europe.
“We wouldn’t be greatly affected by Brexit,” said chief executive George Weston who, however, declined to give his personal view on the question. “It’s the nature of the business that Primark is as close to its local markets — here, in Europe and in the US — as we can make it with separate supply chains in each region.
“We have relatively little cross-border trading between the UK and the rest of the EU. The same is true for our grocery businesses which depend on high volume, low margin goods delivered to local markets.”
ABF’s first-half profits topped analysts’ forecasts with a 4% rise to £466 million despite a 1% fall in Primark’s same-store sales thanks to warm weather the run-up to Christmas. Sugar showed the first growth in profits for three years.
The first two Primark stores in the US have gone down very well but Weston admits it has had to learn some lessons. “They will only buy men’s boxer shorts in black or white and nothing else,” he said. “Flannel pyjamas don’t sell but cotton ones do. And we are selling so many candles that you’d almost think they didn’t have electricity over there.”
ABF shares rose 94p, or 3%, to 3441p.
