Primark finds itself on a high as sales soar 19%

THE high street success story that is Primark showed no signs of abating yesterday, as the discount fashion chain reported a further solid rise in sales, writes Scott Reid.

In a trading update, parent company Associated British Foods said total sales at the 196-store operation rose 19 per cent in the 16 weeks to 2 January.

House broker Panmure Gordon estimated a 7 per cent hike in like-for-like sales – which strip out the impact of store openings and expanded floorplates – as consumers made their way to its doors for bargains in the downturn.

It follows news earlier this week that same-store sales at rival discount clothing emporium Matalan had leapt 9.3 per cent in the 13 weeks to 2 January.

Brokers raised their forecasts on AB Foods, with analysts saying it was coping with the downturn better than most.

As well as Primark, the group is best known for marketing Silver Spoon sugar, Twinings tea and Ovaltine drinks. Panmure Gordon analyst Graham Jones said: "AB Foods is now starting to see the return on its investments in recent years, and we believe the group is very well placed for growth going forwards."

Thanks to the bumper takings at Primark and stronger sugar revenues, AB Foods is anticipating a significant rise in operating profit in the year to September.

Group finance director John Bason said: "We are aware of the downturn, but in the UK, Primark had a very good Christmas."

He highlighted strong sales of fashion accessories and footwear over the period, as well as revenues from winter clothing in the recent cold snap that swept the country.