Cheap chic boosts earnings for Penneys’ owner

Penneys-owner Associated British Foods is set for a big jump in full-year earnings as shoppers snapped up bargains at its discount fashion chain and shrugged off the distractions of the Olympic Games and depressed economic growth in western Europe.

The retailing and food group said it expects annual earnings will be “substantially” ahead as Primark’s formula of cheap chic defies the economic gloom in its key markets of Britain, Ireland and Spain, while it also gained from strong sugar sales.

It reported particularly strong British Primark and Irish Penneys sales this summer, while continental Europe was buoyant, as trading in new stores such as its July opening in Berlin exceeded expectations, and early sales of autumn and winter ranges was encouraging.