The demand for fast fashion and inexpensive clothing is soaring, as proven by the recent growth in revenue by Primark. Shoppers seeking cut-price fashion items helped Associated British Foods, the owner of Primark, beat expectations over the Christmas trading period and saw revenue rise 17 per cent in the first quarter of its financial year, or 11 per cent at constant exchange rates.

Total sales at Primark rose 19 per cent in the 16 weeks to January 2, helped by the opening of new stores. The group did not break down sales at the like-for-like level, but Panmure Gordon, its broker, estimated they rose 7 per cent in the 16 weeks.

“The scale of the increase suggests we are gaining market share,” said John Bason, finance director. “Primark has been very much part of the growth in value clothing, we’ve seen a big increase in that sector, and the trend has been accelerated by the current economic conditions.”

Although expressing caution over economic conditions this year, Mr Bason said Primark’s cut-price offering meant it was “well-placed . .. even in an uncertain climate”.

In the year to September 2009, Primark accounted for 25 per cent of total group sales of £9.3bn. Mr Bason said he expected its strong growth to continue, with plans to open more UK stores this year.

The grocery business, which is ABF’s largest division with more than one-third of total sales, saw turnover rise 4 per cent after a strong performance by the Twinings tea and Ovaltine brands. Sales from sugar, which comprised about 17 per cent of turn-over in 2009, jumped 23 per cent, helped by a more stable EU sugar market and a “terrific” sugar crop harvest.

Warren Ackerman, analyst at Evolution Securities, said: “It is the first time in many years that all three of ABF’s largest divisions are firing on all cylinders at the same time.”

The shares rose 10½p to close at 870p.

Photo: Primark bikini
Source: FT
 

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