Retailers battle through the gloom
Friday 15 July 2011
Two of the retail sector's most powerful operators yesterday showed their rivals a clean pair of heels by posting a strong rise in sales, although both were buoyed by their international divisions.
The discount clothing retailer Primark, which is owned by Associated British Foods (ABF), accelerated its revenue growth to 15 per cent in the 16 weeks to 25 June, driven by a rise in underlying sales and a rapid store opening programme. On the internet, Asos grew retail sales by a whopping 69 per cent, but growth at its international arm streaked ahead of its more mature UK business.
John Bason, the finance director at ABF, said that Primark's sales growth showed "the value end of clothing retailing is really holding up well," although he acknowledged that consumer spending in the UK and Ireland was "weak". City analysts calculated Primark's like-for-like sales had grown by about 3 per cent. But the decision by Primark, which has stores in Spain and Germany, not to raise its prices in 2011 will result in lower margins in the second half to September.
Asos's UK sales growth slowed to 15 per cent, but international jumped by 160 per cent for the 13 weeks to 30 June. Its chief executive Nick Robertson said: "The US, Europe and the rest of the world is absolutely flying."
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