The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
LONDON, United Kingdom — Associated British Foods blamed a fall in shopper numbers and unseasonably warm weather for negative underlying sales at its Primark fashion chain in November, sending its shares lower.
Shares in the group, which also has major sugar, grocery, agriculture and ingredients divisions, fell by as much as 3.3 percent on Friday.
The update on Primark added to evidence of a slowdown in British consumer spending in the run-up to Brexit.
Industry data published on Tuesday showed British consumer spending grew last month at its slowest pace in more than a year, excluding Easter distortions, with online Black Friday sales failing to offset a lack of confidence about the economy.
ADVERTISEMENT
In a brief trading update published ahead of its annual shareholders' meeting, AB Foods said the group's sales and profit for the first eight weeks of its 2018-19 financial year, which began on Sept. 16, were in line with expectations.
However, it said that during November Primark's trading "was challenging, in a tough retail market."
Finance director John Bason told Reuters Primark's like-for-like sales were "just positive" in September and October but were negative in November. He declined to give precise numbers.
"This isn't a call on Christmas — we've got three big weekends coming up now before Christmas. But I think it is a call on quite mild weather during November and I think it's affected footfall," said Bason.
"It's a blip that from a profit perspective we can manage," he said.
He said that with careful inventory management and improved margins, the group's expectation for an increase in Primark's full-year profit was unchanged.
Primark, which accounts for about half of AB Foods' revenue and profit, currently trades from 363 stores in Europe and North America.
AB Foods maintained the overall guidance it issued last month — group adjusted earnings per share for 2018-19 in line with its 2017-18 outcome.
ADVERTISEMENT
The stock was down 2.4 percent at 2,293 pence at 0846 GMT, valuing the business at 18 billion pounds.
By James Davey; editors: Jason Neely and Adrian Croft.
In 2020, like many companies, the $50 billion yoga apparel brand created a new department to improve internal diversity and inclusion, and to create a more equitable playing field for minorities. In interviews with BoF, 14 current and former employees said things only got worse.
For fashion’s private market investors, deal-making may provide less-than-ideal returns and raise questions about the long-term value creation opportunities across parts of the fashion industry, reports The State of Fashion 2024.
A blockbuster public listing should clear the way for other brands to try their luck. That, plus LVMH results and what else to watch for in the coming week.
L Catterton, the private-equity firm with close ties to LVMH and Bernard Arnault that’s preparing to take Birkenstock public, has become an investment giant in the consumer-goods space, with stakes in companies selling everything from fashion to pet food to tacos.