Quick Facts
- Primark will become a standalone company by the end of 2027 through a dividend demerger from Associated British Foods
- The separation could represent the largest FTSE 100 retail demerger, with Primark generating 9.5 billion pounds in annual revenue
- ABF shares fell 4.8% in early trading following the announcement, with the market showing initial concern about the split
Associated British Foods will spin off its Primark retail chain into a standalone company by the end of 2027. The demerger will create two separate publicly traded companies: Primark as a pure-play apparel retailer and FoodCo as the only FTSE 100 pure-play food producer.
Primark operates 486 stores across 19 markets with approximately 83,000 employees. The fast-fashion chain generates 9.5 billion pounds in annual revenue. FoodCo will retain ABF’s global food operations across 52 countries, including brands like Twinings tea and Patak’s sauces, with 9.8 billion pounds in revenue and 55,000 employees.
The separation follows an in-depth review of ABF’s group structure announced in November 2025. CEO George Weston will lead FoodCo after the demerger, while Eoin Tonge, appointed Primark CEO in March, will run the standalone retail business.
“This is quite a big day for us,” Weston said during an analyst call. “For our food business, the separation will enable greater understanding of the breadth and strength of our differentiated portfolio and its long-term growth opportunities.”
The demerger comes as Primark faces challenging market conditions. Sales increased 2% year over year to 4.66 billion pounds in the 24 weeks ending February 28, but like-for-like sales declined 2.7%. Adjusted operating profit fell 13% to 471 million pounds, with margins dropping to 10.1% from 12.1%.
ABF warned that ongoing tensions in the Middle East could further impact consumer spending. Weston noted the company has seen effects on Primark sales “in just the last couple of weeks” across Europe as the conflict influences shopper behavior.
The fast-fashion retailer also faces competitive pressure from online challengers like Shein and Temu, which undercut prices while established players struggle with margin erosion. James Watson of Argon & Co. noted that “Primark’s revenue base is heavily concentrated in the UK, where growth has been largely flat.”
ABF expects one-off separation costs of approximately 75 million pounds and dis-synergies below 45 million pounds. The company anticipates the cleaner structure will allow more efficient capital allocation and enable Primark to pursue expansion more aggressively.
Rothschild & Co, serving as lead financial adviser, called the transaction “a landmark” that will create the largest pure-play FTSE 100 apparel retailer. The demerger is subject to regulatory approvals and tax clearances.
