Associated British Foods has reported a decline in sales at Primark, its fast-fashion subsidiary, as the company moves forward with plans to spin off the chain into a separate publicly traded entity. The quarterly results, released on July 1, showed a drop in like-for-like sales at Primark, driven largely by weakening consumer confidence in the UK and continental Europe.
AB Foods has maintained that Primark’s online strategy — which uses a website for browsing and stock-checking rather than direct-to-consumer sales — will prove resilient as shoppers return to in-store purchasing for certain categories. The chain has continued to expand its footprint, opening new locations in Eastern Europe and the United States.
AB Foods first announced its intention to separate Primark in late 2025, arguing that the structure would allow each business to pursue its own capital allocation strategy. The fast-fashion chain has long been the growth engine of the group, but its margin profile has come under pressure from rising input costs and logistical complexity.
Industry observers have questioned whether Primark can thrive as an independent entity given the intensifying competition from ultra-fast-fashion players like Shein and Temu, which operate with fundamentally different cost structures. Primark’s model, built on high-volume, low-price offerings sold exclusively through physical stores, faces structural challenges in a market that has shifted aggressively toward digital discovery and doorstep delivery.
The demerger is expected to complete by the end of the 2026 fiscal year, pending regulatory and shareholder approvals. Primark will retain its existing management team under CEO Paul Marchant, who has led the chain since 2009 and overseen its expansion from a UK-focused retailer to an international player with over four hundred stores.
The company attributed the slowdown to a combination of factors: persistent inflation pressuring disposable income among Primark’s core demographic, unseasonably cool weather delaying spring purchases, and what executives described as ‘geopolitical uncertainty’ related to ongoing conflicts weighing on household sentiment.
