Associated British Foods is expected to outline plans to separate its Primark fashion chain from its food businesses when it gives an update on a review of the group’s structure on Tuesday.
Primark trades as Penneys here.
In addition to Primark, which trades from 486 stores in 19 markets and contributes over half of AB Foods’ profit, the London-listed group owns grocery brands such as Ovaltine, Ryvita and Twinings, as well as major sugar, agriculture and ingredients operations.
AB Foods launched a review of its structure last year, assisted by Rothschild, with a view to maximising long-term value. Shares in the group have fallen 14% over the last year.
CEO George Weston said in November the group hoped to conclude the review by April 21 when first-half results are published. He said a Primark separation was the “working assumption”.
The review is being conducted in consultation with Wittington Investments – the holding company for the Weston family – which is committed to maintaining majority ownership of both businesses.
“We expect ABF to confirm that it intends to demerge Primark and Food, which makes sense given the lack of synergy between the two,” Richard Chamberlain, global co-head of consumer and retail at RBC Capital Markets, said.
Another big clue that AB Foods will proceed with a split came last month when it appointed Eoin Tonge as Primark’s permanent CEO.
Tonge, formerly AB Foods’ finance chief, had served as interim Primark CEO since March 2025 when Paul Marchant abruptly resigned.
The Primark management team was also strengthened with the appointment of Filip Ekvall, a former H&M executive, to a newly created role of chief commercial officer.
AB Foods has said financial markets would better understand and appreciate the food businesses if Primark was a standalone listed business, with the fashion chain having the scale and growth opportunities to go it alone.
The first-half results will, however, reflect challenges for both sides of the group, which warned on profit in January.
Primark is exposed to rising freight and energy costs due to the Iran war, while in the US cooking oils and bakery ingredients markets are under pressure.
