Penneys owner gets new year lift

Penneys and Primark owner Associated British Foods today said retail trading so far this year had been good, particularly in light of the economic climate.

Fuelled by nine Primark store openings in the first half of its financial year, AB Foods said its retail sales for the six months to March 3 are expected to be 15% ahead of last year, with like-for-like sales up 2%.

The update comes a month after AB Foods reported an “exceptional” Christmas at Primark’s 232 stores, with trading much improved on a sluggish autumn.

It offered further encouragement today as falling cotton prices mean it will see the benefit of lower input costs in the second half of the year.

Two of the store openings were in the UK, including a flagship store on Princes Street, Edinburgh before Christmas. It also relocated the store in the Metro Centre, Gateshead and extended an outlet in Bexleyheath.

Across the group, which also trades in sugar and owns the Kingsmill bread and Twinings Ovaltine businesses, profits for the half-year are in line with hopes.

Improved weather conditions and higher prices means profits in the UK sugar business should be well ahead of last year. UK sugar production is now estimated to be 1.3 million tonnes compared with just under one million tonnes last year.