Primark hires new boss as proprietor evaluations spin-off

Primark has hired a new boss as it seeks to get back on track ahead of a spin-off from its owner and a potential stock market listing.

Eoin Tonge, former finance boss at owner Associated British Foods (ABF) and interim Primark boss, has now been appointed to run the fashion chain after Paul Marchant quit in a scandal over his behaviour last year.

ABF chief executive George Weston said: ‘Following a comprehensive search process, I am delighted to confirm Eoin as chief executive of Primark. 

‘Over the past year he has demonstrated the leadership, judgement and consumer insight needed to enable Primark to capture the significant opportunities ahead.’

Primark – who sells a range of clothes by Rita Ora – has struggled with weaker sales in Europe

Former H&M boss Filip Ekvall has also been hired into a newly created chief commercial officer role.

The update follows a profit warning from ABF earlier this year off the back of weaker European sales at Primark and challenges in its US food business.

ABF had been set to announce in April whether its retail arm will be spun out into a new entity, according to sources close to the issue. Last year ABF launched a review of its business, paving the way for a break-up of the £16 billion empire.

Dan Coatsworth, head of markets at AJ Bell, said: ‘With the new team now in place, parent group Associated British Foods will be hoping for a rapid improvement in sales and profit growth if it still wants a fighting chance of spinning off Primark.

‘The better the financial and strategic position of Primark, the higher the valuation investors will be prepared to pay to own shares in the retail business as a standalone entity.’

But questions remain as to whether a spin off will be impacted by weak sales at Primark and conflict in the Middle East.

Attacks on Iran by the US, and subsequent conflict in the region, has spooked investors this week. Travel firm Loveholidays is reportedly considering delaying its £1bn London listing as nervousness has fed into a sector sell-off this week.