The Littlewoods chain of 120 retail outlets will now be taken over by British group, Associated British Foods PLC (AB Foods) for £409 million stg in cash and debt in its bid to strengthen the hold of Primark, its discount clothes retail group, in Britain.
Just a few months back this year, Primark purchased six stores from the busted group, Allders, and is now on its way to transform about 25-40 large stores that would be equivalent to around 40 % of Littlewoods’ 2.1 mln square feet of retailing sale space.
Chief executive of Primark, George Weston stated during an interview that acquiring Littlewoods was indeed a strong move towards making Primark establish its presence in the high street. Calling it a “unique opportunity”, Weston said that Primark would arrive “to many towns and cities where it is currently not present.”
Meanwhile, the Littlewoods clothing chain has decided to keep its lucrative catalogue shopping business.
After taking customers from high-class Marks & Spencer Group PLC and retail entrepreneur Philip Green’s Arcadia group, Primark’s operating profit in the first-half rose by 18% and touched 59 mln stg, with its sales soaring 12%.
Primark’s parent, AB Foods further added that the discount retail chain that sold sleeveless womens’ tops for 2 pounds had showcased quite a robust performance after figures in March. In addition, the AB Foods group anticipates the operating profit derived from the new Littlewoods stores to surpass the cost of funds employed, in the full first year term once it is completed.