Primark posts 20% rise in third quarter sales

LONDON, England - Associated British Foods posted an 8 percent rise in third quarter sales, driven by another strong performance from its Primark discount clothing chain. Sales at the apparel chain grew 20 percent in the 16 weeks to June 22.

As expected, that was at a slower pace than the first half of the year when total Primark sales rose 24 percent and at 7 percent on a like-for-like basis, as freezing weather in March and April hit trade, the firm said.

Third-quarter revenue at the group's grocery division, whose brands include Twinings, Ryvita and Ovaltine, rose 7 percent, but declined by 15 percent at its sugar business.

The group said it remained on track to make good progress in adjusted earnings per share for the full year in line with expectations.

While many British retailers have struggled as consumers fret over job security and squeezed incomes, Primark has surged ahead with low prices pulling in cost-conscious customers and sending sales up 22 percent in the year to date.

AB Foods said underlying sales at the Primark, which has 250 stores in the UK and Europe and generates about a third of group profit, had been subdued by a cold March and April, but added that better weather since had led to an improvement.

In April the firm came under scrutiny after 1,129 people died in the collapse of a factory in Bangladesh where clothes were made for various international brands including Primark.

The collapse of the Rana Plaza building ranks among the world's worst industrial accidents and highlighted the risks involved with the global retail industry's search for cheap production.

In May a new accord was launched by trade unions and signed by 70 brands, including Primark, which have agreed to accept legal responsibility for safety at their Bangladesh factories.