Concerns are mounting that the owner of Primark could become a riskier investment if it confirms plans to spin off the discount clothing chain next week.
Shareholders in Associated British Foods (ABF) are understood to be worried that both businesses would be more exposed to global economic swings as one side of the operation would no longer be able to offset the other.
This weekend one ABF investor told The Mail on Sunday that the break-up would make Primark and the remaining food business ‘more cyclical and more risky’. ABF is expected to announce that it will separate the fashion brand at its half-year results on Tuesday.
Fashion faux pas?: Primark’s spin-off is expected to be announced at ABF’s half-year results
But analysts have previously questioned how Primark will perform as a standalone firm due to fears that conflict in the Middle East could fuel a cost of living crisis, weighing on sales.
Primark faces intensifying rivalry from Chinese online giants Shein and Temu. Meanwhile, ABF’s food arm could be hit by rising energy costs from the Middle East conflict.
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