The conglomerate Associated British Foods expects higher profitability and more sales in its Primark stores in the coming months. After unexpectedly good sales figures in the past few weeks, an operating margin of more than ten percent is targeted by the half of the financial year, the group and its fashion chain announced on Thursday in London. However, Primark is still lagging behind the sales achieved before the pandemic. Around 400 jobs are now to be cut at Primark.
In the 16 weeks ended Jan. 8, Associated British Foods’ sales of its Primark fashion chain were up 36 percent at constant exchange rates from a year earlier. At that time, many shops in Europe remained closed. However, sales in the last comparative period before the pandemic were still five percent above the current level at Primark, although Primark gained sales space through new openings.
All in all, AB Foods has increased sales in the course of the financial year to just under 5.6 billion pounds sterling (7.2 billion euros). Compared to the same period of the previous year, this corresponds to growth of 19 percent adjusted for currency effects. Growth is still being slowed down by supply bottlenecks and rising raw material and energy costs in the group’s second-largest division: According to AB Foods, it had to increase its prices in the food business. (dpa)