UK food manufacturing giant Associated British Foods (ABF) has made moves to sell its retail arm, comprising more than 100 budget clothing stores trading under the name Primark in Britain and Penney’s in Ireland.
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According to the Sunday Times, the deal could be worth £850m (US$1.32bn). It is expected to surprise the market, as ABF had been widely expected to hang onto ownership of the retail arm. Indeed CEO Peter Jackson has spoken at length about his plans to invest n the division and grow it.
Primark in particular has been performing well in the dynamic UK discount clothing sector. Claiming to sell more lingerie in Britain than any other retailer except runaway leader Marks & Spencer, the company boasts annual sales in the region of £500m and profits worth £60m. If sold, the paper reports, it would be part of a package including Allied Glass Containers, ABF’s glass-packaging business.
A number of potential buyers have been sounded but no formal negotiations have commenced as yet.
One of the largest family-owned businesses in the country, ABF has a stockpile of some £800m for acquisitions, but has shown no haste to spend this money.
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By GlobalData
