Primark set to keep more Littlewoods stores

Clothes retailer Primark was today preparing to bolster its presence in the UK after deciding to hold on to more former Littlewoods sites than originally planned.

Primark, which picked up 120 Littlewoods stores in a £409m (€606.5m) deal in July, said it expected to retain 1.15 million square foot of space at the chain, compared with 800,000 square foot previously expected, before selling the rest to rival retailers.

Analysts believe this means Primark will keep around 40 stores – at the top end of the 25 to 40 figure predicted when the deal for Littlewoods was announced in July.

The Littlewoods chain, which has been in existence since 1937, holds some of the UK’s most prominent high street sites.

The decision came after 123-store chain Primark completed an evaluation of the Littlewoods portfolio and also revealed trading at its own stores had been “very strong” in recent months.

Parent company Associated British Foods, whose other brands include Twinings, Ryvita and Kingsmill bread, said in a pre-close update that same-store sales at Primark were expected to be 12% higher in the second half of its financial year - bringing full-year growth to 9%.

The figure is stronger than that reported by many of its high street rivals hit by the recent slowdown in consumer spending.

The growth helped AB Foods report that trading across the wider group was in line with an announcement made at the time of its half-year results in April. Group operating profits growth in the second half was expected to be almost as strong as that achieved in the first half.

This included strong sales growth from brands such as Twinings tea and Ovaltine, although the UK bakery operation was affected by lower than expected pricing and volumes.

AB Foods also said UK profits at British Sugar had been affected by the oversupply of sugar in the EU and higher energy costs, as expected. However, profits were boosted by better prices in China and an improved operational performance in Poland and China.

The group is due to report results for the year to September 17 on November 8.