The value fashion giant Primark defies recession by declaring that its half-yearly sales would go up by 5%, but revealed that performance of grocery division of its Associated British Food (ABF) will be disappointing.

According to the finance director, John Bason of ABF, which sells brands that include Silver Spoon sugar, Ovaltine drinks and Kingsmill bread among others, there was no impact on Primark’s half-yearly sales to February 28, after BBC’s programme in January which revealed that workers of Primark’s garment suppliers were underpaid and were living in terrible conditions. Bason claimed that sales figure proved broadcast had no adverse impact.

Primark has outperformed most of the clothing stalwarts of high street including Next and Marks & Spencer which posted retail like-for-like sales decline by 7 and 8.9% respectively.

However, Primark’s operating profit margin is likely to be pulled down by the increased overheads and the cost of 640,000sq ft distribution centre at Thrapston.

Primark started 6 new stores, including two in the UK and first in the Netherlands in Rotterdam. 7 more, including first of its stores in Germany, Lisbon, Portugal and Bremen and 3 in the UK would be opened in the second half of current financial year.

Analyst Graham Jones, at Panmure Gordon, believes that Primark was progressing to become truly pan-European retailer, although it had big opportunities of growth in domestic market as well.

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