Proactive’s Post

Shares of Primark owner Associated British Foods PLC (LSE:ABF) surged 9% following a robust first-half financial performance, driven by substantial margin recovery and operational enhancements, prompting it to upgrade its full-year forecasts. Despite a modest 2% rise in group revenue to £9.7 billion, adjusted operating profit soared 39% to £951 million, and adjusted earnings per share increased by 46% to 90.4p. CEO George Weston lauded the results as "very strong," attributing the gains to normalised market conditions and improved supply chains while highlighting ongoing investments for sustainable growth amidst geopolitical uncertainties. Shore Capital's veteran retail analyst, Clive Black, said the results represented a significant 'beat' versus consensus forecasts ahead of Tuesday's numbers.  He added: "ABF lost some buy-side friends around the pandemic, especially with no online presence in Primark and... More at #Proactive #ProactiveInvestors http://ow.ly/4vjS105qqWn

To make a sound financial investment, it's essential to examine the data thoroughly rather than simply taking the company's word for it. Associated British Foods (Primark owner)'s profits soar does not stem from the company's investments but is an indirect consequence of the economic crisis, which has prompted consumers, particularly the middle class, to seek savings by turning to cheaper alternatives (indeed, Primark offers the most affordable clothing). Therefore, investors must carefully assess the profitability of Associated British Foods' shares: in the short and medium term (until economic stagnation persists), there will be significant profits. However, with the cyclical nature of economic recovery, many consumers are likely to revert to purchasing higher quality, higher priced products, abandoning Primark and thereby boosting the profits of other brands. Ergo, in the event of investing in Associated British Foods shares or bonds, it is advisable to avoid long-term commitments and sell the shares before the conclusion of the economic crisis.

UK Lessons – What Primark Did to Competitors Like Peacocks and Bonmarche When Primark expanded aggressively into the UK, it wasn’t just another retailer—it was a disruptor. Established budget-friendly brands like Peacocks and Bonmarché initially tried to respond by slashing prices, but Primark’s efficiency, lower costs, and fast-fashion model made it hard to compete. Within just a few years, both Peacocks and Bonmarché had filed for administration, unable to withstand the pressure. What does this mean for brands in the GCC? Could similar value-fashion brands face the same challenge? Or will we see local players innovating to stay ahead? Up next, we’ll dive into the impact Primark had in Spain, where even established local players struggled to survive. 🌍 #PrimarkVsUK #RetailDisruption #FashionWars #PrimarkEffect #ValueFashion

The FTSE 100 soared to a record intraday of 8,070 as the market opened after closing at an all-time high on a strong performance yesterday. Fuelling gains early on was Primark owner ABF, which soared after unveiling bumper interim results where stronger margins took pre-tax profits 37% higher to £881 million. JD Sports was also rising, having announced the proposed US$1.1 billion takeover of US retailer Hibbet amid plans to expand further across the Atlantic. THG gained on news revenue growth had continued to accelerate over the first quarter, following several major turnaround initiatives taken in recent years. And finally, Taylor Wimpey offered up some positive commentary for the UK housing market in the meantime, noting welcome ‘stability’ despite lower sales as the spring selling season got underway. Watch at #Proactive #ProactiveInvestors http://ow.ly/lGNE105qqxz

London's FTSE 100 just ticked up on Thursday morning, following a steady decline so far this week. A busier day in London brought several reports, including from ABF, which led the FTSE 100’s fallers early on after revealing subsidiary Primark faced a drop in first-half sales. Housebuilder Vistry climbed in the meantime, having announced £130 million worth of buybacks on the back of a jump in sales and profit over the first half. Currys slipped after reporting enthusiasm around AI-enabled products was growing in the UK and Ireland, but subdued conditions remained in the Nordics. And finally, news that ASOS was to create a joint venture and offload a majority stake in its Topshop and Topman brands to the parent of Denmark’s Bestseller saw shares soar as the market opened. Watch at #Proactive #ProactiveInvestors http://ow.ly/wv4T105HJzW

Woolworths could be back… Once loved for its sweets and bargains, Woolworths could reopen in the UK over a decade after its closure. Woolworths Germany chief Roman Heini has the British market on his radar as he eyes international growth. But supply chain and economic challenges mean a UK return is not imminent. Affectionately known as "Woolies", the variety retailer shut its 807 UK stores in 2009 amid financial crisis. Its absence left a nostalgic legacy. Now a clothing and homeware retailer, Woolworths Germany believes brand recognition remains high in Britain. But securing naming rights would be crucial to avoid confusion. While risky in today's climate, Woolworths' comeback would tap into nostalgia. But it would need a reinvented model to thrive on UK high streets once again. Learn more here: https://lnkd.in/e-94tq_C #retail #economy #sustainability

What happened in retail this week? 👇 - Tesco profits more than doubled as it sees easing price pressures. - Marks and Spencer unveiled new investments in a push to achieve net zero by 2040. - Home Bargains saw its turnover jump 10.2% from £3.4bn to £3.7bn in the year to 30 June as it pushes ahead with expansion plans. - Asda become the first UK supermarket to launch an online prescription service. - Tesco launches dedicated page to champion fresh British produce with over 500 products. - Tesco is trialling a 10p hanger charge in a new pilot scheme for shoppers purchasing F&F clothing, in a bid to reduce plastic waste. - Morrisons invested £1.4m in opening a new on-site innovation centre to support the growth of its Greenside fresh food manufacturing operation. - Poundstretcher Ltd. was sold to Fortress Investment Group, who on April 11 said it had acquired the discount chain, which operates from over 320 stores nationwide and employs more than 4,000 people. - Sainsbury's is championing its sustainability initiatives in a new in-store marketing campaign named ‘Good To Know.’ — — — — — — — I post the biggest stories from the UK’s biggest retailers each week. Connect with me to never miss a weekly update. #Retail #News #April 

Morgan Stanley (NYSE:MS) has made Tesco PLC its top pick in the European retail sector in a wide-ranging note that includes an upgrade for J Sainsbury PLC (LSE:SBRY) but downgrades for H&M, Primark-owner Associated British Foods PLC and Kingfisher PLC (LSE:KGF). The investment bank said its thesis for the year ahead is simple.  As price inflation moderates across geographies, top-line growth will become increasingly reliant on volumes.  “We expect retailers who are in the sweet spot to be rewarded by the market, as volume-led top-line growth should command a higher multiple and as volumes improve, margins stand to benefit from operating leverage." The bank said the market is overly fearful of deflation and is missing the bounce-back in volumes.  Morgan Stanley (NYSE:MS) expects volumes/mix to turn positive from the second quarter of 2024, driving 2025 annual growth of 2.5%. More at #Proactive #ProactiveInvestors #LSE #TSCO http://ow.ly/n5vH105f1TS

𝐀𝐋𝐒𝐇𝐀𝐘𝐀 𝐒𝐄𝐓𝐒 𝐓𝐇𝐄 𝐒𝐓𝐀𝐆𝐄 𝐅𝐎𝐑 𝐏𝐑𝐈𝐌𝐀𝐑𝐊’𝐒 𝐃𝐄𝐁𝐔𝐓 𝐈𝐍 𝐓𝐇𝐄 𝐌𝐈𝐃𝐃𝐋𝐄 𝐄𝐀𝐒𝐓 𝐀𝐥𝐬𝐡𝐚𝐲𝐚 𝐆𝐫𝐨𝐮𝐩’𝐬 newly announced partnership with Primark, the Irish fashion powerhouse renowned for its value-driven approach, is poised to reshape the Middle Eastern fashion retail landscape. This collaboration signals Primark’s long-anticipated entry into the GCC—a development eagerly awaited by value-conscious consumers. From an industry perspective, this alliance stands out for its strategic implications. Alshaya’s dominance in franchise operations and Primark’s distinctive value-fashion proposition create a potent combination. While many global brands have already staked their claim in the region, Primark’s entry marks a new chapter in affordable fashion—introducing a model that is both accessible and trend-driven. John Hadden, 𝗖𝗘𝗢, 𝗔𝗹𝘀𝗵𝗮𝘆𝗮 𝗚𝗿𝗼𝘂𝗽 said "𝘞𝘦 𝘢𝘳𝘦 𝘪𝘯𝘤𝘳𝘦𝘥𝘪𝘣𝘭𝘺 𝘱𝘳𝘰𝘶𝘥 𝘵𝘰 𝘱𝘢𝘳𝘵𝘯𝘦𝘳 𝘸𝘪𝘵𝘩 𝘗𝘳𝘪𝘮𝘢𝘳𝘬 𝘵𝘰 𝘥𝘪𝘴𝘤𝘶𝘴𝘴 𝘱𝘰𝘵𝘦𝘯𝘵𝘪𝘢𝘭 𝘰𝘱𝘱𝘰𝘳𝘵𝘶𝘯𝘪𝘵𝘪𝘦𝘴 𝘵𝘰 𝘣𝘳𝘪𝘯𝘨 𝘵𝘩𝘦𝘪𝘳 𝘴𝘵𝘰𝘳𝘦𝘴 𝘵𝘰 𝘵𝘩𝘦 𝘳𝘦𝘨𝘪𝘰𝘯. 𝘍𝘰𝘳 𝘮𝘢𝘯𝘺 𝘺𝘦𝘢𝘳𝘴, 𝘴𝘩𝘰𝘱𝘱𝘦𝘳𝘴 𝘢𝘤𝘳𝘰𝘴𝘴 𝘵𝘩𝘦 𝘳𝘦𝘨𝘪𝘰𝘯 𝘩𝘢𝘷𝘦 𝘢𝘴𝘬𝘦𝘥 𝘧𝘰𝘳 𝘗𝘳𝘪𝘮𝘢𝘳𝘬 𝘢𝘯𝘥 𝘸𝘦 𝘢𝘳𝘦 𝘭𝘰𝘰𝘬𝘪𝘯𝘨 𝘧𝘰𝘳𝘸𝘢𝘳𝘥 𝘵𝘰 𝘵𝘩𝘦 𝘴𝘵𝘢𝘳𝘵 𝘰𝘧 𝘢 𝘴𝘶𝘤𝘤𝘦𝘴𝘴𝘧𝘶𝘭 𝘱𝘢𝘳𝘵𝘯𝘦𝘳𝘴𝘩𝘪𝘱 𝘵𝘰 𝘩𝘦𝘭𝘱 𝘣𝘳𝘪𝘯𝘨 𝘵𝘩𝘦𝘪𝘳 𝘦𝘹𝘤𝘦𝘱𝘵𝘪𝘰𝘯𝘢𝘭 𝘪𝘯-𝘴𝘵𝘰𝘳𝘦 𝘦𝘹𝘱𝘦𝘳𝘪𝘦𝘯𝘤𝘦 𝘵𝘰 𝘵𝘩𝘦 𝘎𝘊𝘊.” We will be closely watching how this partnership unfolds and will keep you updated on the broader impact it may have on the region's retail dynamics. 𝐀𝐛𝐨𝐮𝐭 𝐏𝐫𝐢𝐦𝐚𝐫𝐤 ————————— Founded in Dublin, Ireland, 55 years ago, Primark now operates over 450 stores across 17 markets, offering customers great value essentials and high-quality fashion ranges at affordable and accessible prices for everyone. 𝐀𝐛𝐨𝐮𝐭 𝐀𝐥𝐬𝐡𝐚𝐲𝐚 𝐆𝐫𝐨𝐮𝐩 ———————————— Alshaya Group, a family-owned business established in Kuwait in 1890, has grown into one of the world’s leading brand franchise operators. With over 4,000 stores across MENA, Türkiye and Europe, Alshaya’s portfolio spans more than 70 well-known international brands, including Starbucks, H&M, Victoria’s Secret, Footlocker, Charlotte Tilbury, Raising Cane’s, Shake Shack and Chipotle. #RetailIntelligence #MiddleEastFashion #StrategicPartnership #GCCRetail #RetailDisruption #AlshayaGroup #Primark #IMAGESRetailME

An interesting article in The Times looks at Primark's steady expansion in the US. While phenomenally successful, the chain has taken a deliberately cautious approach to growing stateside - learning from past European brands' mistakes in the American market. As the article notes, Kevin Tulip's leadership as President of Primark US has been instrumental in the brand's success, focusing on strategic expansion and adaptation to American tastes. With plans to open 100 more stores globally by 2026, including a significant focus on America, Primark aims to stand out in a competitive retail landscape dominated by discount giants like Walmart and Target. Primark's approach combines affordable pricing with quality products, is resonating well with American consumers. By adapting to local tastes and leveraging licensing deals with popular franchises like Disney and sporting leagues, Primark aims to cement its position in the American retail market.