Primark operates almost 500 locations in a total of 19 countries.Image: www.imago-images.de
The Ovaltine group Associated British Foods wants to spin off its subsidiary Primark. The decision was made with the aim of maximizing returns in the long term.
April 22, 2026, 10:31 amApril 22, 2026, 10:31 am
Primark parent company Associated British Foods (ABF) announced on Tuesday that it would separate the budget fashion chain from the grocery store. The two very different divisions should be better managed in the future.
After a thorough review, the board of directors “concluded that a spin-off (…) is the best way to maximize long-term returns for shareholders, given the size that Primark has achieved today within the group,” said its chairman Michael McLintock in a statement.
Primark, founded in Ireland in 1969 under the name Penneys, accounts for almost half of the group’s revenue. The rest of the activity is focused on the food sector, with ABF being a major sugar producer and owning numerous brands such as Twinings, Jordans and Ovaltine.
Not the same investors
For years ABF stressed that it would never separate Primark from the group, arguing that a “conglomerate structure offers advantages”. But “the more Primark has grown, the stronger the calls have become for the company to stand on its own two feet,” says Dan Coatsworth of AJ Bell.
According to the analyst, food and apparel don’t necessarily attract the same investors.
The group specifies that both will be listed in London. “Given their size, both are expected to be part” of the benchmark FTSE 100 index. The food division will retain the name “Associated British Foods”.
A declining net profit
Primark operates almost 500 stores in 19 countries, with annual sales of around £9.5 billion (10.9 billion euros) and more than 83,000 employees. It is “one of the biggest retail success stories of the last twenty years. “The brand has shown that the future of retail does not depend on the internet as physical stores remain a reliable way to make money,” said Dan Coatsworth.
The food division, for its part, is present in 52 countries, with annual sales of around 9.8 billion pounds (10.3 billion francs) and more than 55,000 employees. ABF also announced on Tuesday a 14% fall in net profit to 445 million pounds (511 million euros) for its first, delayed half-year, which ended at the end of February.
“We knew the first half of this financial year would be difficult,” said managing director George Weston. But he expects “an improvement in performance in the second half of the year”.
“Primark has continued to make solid progress in revitalizing its customer offering in a difficult clothing market.”
ABF shares on the London Stock Exchange fell around 3.5% on Tuesday morning. The spin-off is expected to take effect before the end of 2027. Among other things, it will cause “one-off costs” of around 75 million pounds (79 million francs). (jzs/afp/fwa)