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Penney wise?
John Mulligan



DISCOUNT retailer Primark has built a sizeable celebrity band of aficionados. Just recently Sara McDonald (above), girlfriend of Oasis member Noel Gallagher, stepped out at the Qmusic awards in a £10 dress from the retailer. Cheap is now most de"nitely cool.

But Primark owner Associated British Foods, which also owns the Penneys chain in Ireland, disappointed markets last week when it said that second-half pro"t slumped 25% to £135m ( 200m) as sales at Primark remained stagnant and higher energy costs eroded the bottom line. ABF said Primark revenue was effectively unchanged in the period.

One London analyst said the like-for-like shop sales figures "provide some concern". Operating margins are likely to be dampened by the higher depreciation charge associated with investment in new Primark shops while a shop-opening programme will probably affect sales at existing outlets.

ABF also owns Kingsmill bread, which suffered from competition. Primark accounts for about one-sixth, or £1bn of ABF's annual sales. The company has acquired 120 shops owned by Littlewoods. It is converting 40 of them to Primark shops, while the rest will be sold.

Last week the wife of former Republic of Ireland football manager Mick McCarthy opened a new Primark shop in Wolverhampton.




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