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'Exceptional' Primark leads the way for owner AB Foods
Budget retail chain Primark yesterday defied the gloom on the high street as it notched up an 8 per cent rise in annual profits.
The retailer, which has 11 stores in Yorkshire and is part of grocery business Associated British Foods, grew sales by 20 per cent to 2.3bn in the year to September 12. It has opened 12 new stores and improved revenues on a like-for-like basis by 7 per cent.
Primark achieved operating profits of 252m in the 12-month period – a performance described by AB Foods as "exceptional".
The chain has seen strong expansion in the UK and Spain in recent years.
AB Foods, which also owns the brands Twinings, Ryvita and Kingsmill, reported underlying profits of 655m, an increase of 4 per cent on a year earlier. It came as tea firm Twinings announced plans to cut almost 400 UK jobs as it shifts its manufacturing focus overseas,
Primark founder Arthur Ryan announced his intention to relinquish day-to-day running of the firm two months ago. He has been replaced by chief operating officer Paul Marchant, who has experience at several high street chains including Debenhams and New Look. Mr Ryan, who set up the business in 1969 and is in his early 70s, is now chairman of Primark.
The firm also fought back over accusations it exploits overseas workers to make its clothes, saying its record on ethical trading was subject to close scrutiny and that it had contributed to industry-wide efforts to improve labour standards.
AB Foods said: "It (Primark) offers good quality fashion at low prices because it purchases very large volumes and has low mark-ups, minimal advertising and low overheads."
More than 95 per cent of Primark's third party suppliers are shared with other leading European high street brands, it added. Primark has committed to undertake over 1,000 audits in 2009.
Revenues in the company's grocery division rose 13 per cent to 3.19bn, driven by the effect of price increases taken in the previous year and progress by Twinings Ovaltine and Allied Bakeries.
Profits declined by 2 per cent to 191m as a result of first half problems for Mazola owner ACH in the United States and a "highly competitive" UK retail sugar market for Silver Spoon.
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Weather for Yorkshire
Wednesday 23 May 2012
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