Weather woes finally catch up on Primark

High street darling '‹Primark '‹has fallen prey to the same warm weather woes that have hit more traditional rivals Marks & Spencer and Next.

Primark has previously been immune to the troubles faced by its rivals as its cheap “Primarni” (Primark meets fashion designer Armani) take on catwalk fashion resonated with younger customers, but its like-for-like sales fell around one per cent in the six months to February 27.

Next warned that 2016 would be the toughest for fashion retail since the economic meltdown in 2008 due to subdued consumer spending on clothing as people spend more on eating out and travel.

Sign up to our Business newsletter

Sign up to our Business newsletter

Analyst Darren Shirley at Shore Capital said: “Primark’s like-for-like sales were subdued, said to be down less than one per cent and impacted over the Christmas period by warmer weather over Northern Europe.”

Despite the damage caused by warm weather over the winter, Primark has high hopes for its spring and summer ranges. Best sellers include a women’s black camisole for £8 and an on-trend print drawstring jogger for £8.

Primark has managed to undercut its rivals for a number of years and its buyers focus on the latest trends to suit the fashion conscious shopper.

Primark​‘s parent company​ Associated British Foods announced ​a four per cent rise in ​half​ ​year pre-tax profits to £466​m.

​Operating p​rofits at ​Primark fell three per cent ​to £313m in the six months to February 27 on an actual currency basis, but were down just one per cent on a constant currency basis.

​Its sales rose five per cent to £2.7bn.

​​Primark said that trading at its first two US stores has been encouraging and it plans to opens six more outlets in the US this year.

Overall, group revenue ​fell two per cent​ to £6.1​bn on an actual currency basis but rose two per cent in constant currency.

A​B Foods​‘​ chief executive George Weston said: “These results demonstrate underlying progress for all of our businesses in the period despite currency.

“Good buying and selling space expansion continued at Primark, cost reduction and performance improvements contributed to a better result at ​s​ugar, profits were well ahead at ​i​ngredients, and profit margins improved at ​g​rocery and ​a​griculture.”

​AB Foods said it would not be damaged by a Brexit vote for Britain to leave the EU in the referendum in June.

“The important point to get across today, really to our shareholders, is that Brexit isn’t a major threat to us one way or the other,” said Mr Weston.

“We’ve had a good look at the potential impact of either Brexit or not Brexit on AB Foods and it’s not very big,” said Weston, whose family has a majority holding in AB Foods’ shares.

He said the limited impact was due to two reasons.

“Firstly we have a natural hedge between euro and sterling earnings and secondly we are not moving much manufactured food product between the eurozone and the UK. Our supply chains are quite local.

“So we’re not likely to be impacted to any great extent by changes in currency or changes in tariff.”​

​The group said that s​ugar sales fell ​nine per cent​ to £843​m but the division delivered a £6​m profit, driven by cost savings. Profits at ABF’s grocery unit, which houses Twinings tea and Ryvita, rose ​two per cent​ to £130​m.

The group added that its currency problems have started to ease and the weakening of sterling in recent weeks, particularly against the euro, will ease the effect of currency translation on this year’s results assuming current rates prevail.