Primark and Asos show the way with storming figures

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The Independent Online

The discount fashion chain Primark and online specialist Asos posted strong sales yesterday, reinforcing their status as two of the retail sector's best performers in recent years.

Primark, the discount fashion chain owned by Associated British Foods (ABF), put another nail in the coffin of its collapsed rival, Peacocks, with a 16 per cent jump in revenues over the 16 weeks to 7 January.

Meanwhile, shares in Asos rocketed by nearly 18 per cent to £17.60p yesterday after it unveiled a leap in gross margins, although an improvement in its UK sales was outshone by barnstorming overseas growth.

John Bason, the finance director of ABF, the sugar-to-grocery conglomerate, declined to comment on yesterday's administration of Peacocks, but said Primark had "taken [market] share" from across the sector over the 16 weeks to 7 January.

Primark, which has 232 stores in Europe, grew total sales by 16 per cent over the period, boosted by new stores. Credit Suisse estimated that Primark's like-for-like sales grew 2 per cent, with a "soft autumn" more than offset by a storming Christmas.

Industry experts believe that, while the fate of Peacocks was ultimately sealed by its £240m of debt, the chain struggled to compete against Primark. But Primark said its operating margin was lower, reflecting higher cotton prices.

Group revenues at ABF rose by 12 per cent.

Asos' UK retail sales jumped by 10 per cent in the three months to 31 December, ahead of City expectations and an improvement on its 1 per cent rise in the previous quarter. The star performer was its international business, which grew sales by 93 per cent.

Nick Robertson, chief executive, said: "It is challenged in the UK. But fortunately we sell to 20-somethings all over the world."

Its retail gross margins rose by 300 basis points. Total retail sales rose by 46 per cent to £146.5m.