Primark Owner ABF Hires Finance Head from Retail Rival Marks & Spencer

Associated British Foods

PLC, owner of the fast-fashion Primark chain, is reshuffling its finance organization as it faces higher raw-material and energy costs.

The London-based retail and food-processing conglomerate on Thursday said

Eoin Tonge

would become its new finance director. Mr. Tonge, who currently serves as chief financial and strategy officer at retail chain

Marks & Spencer Group

PLC, will join no later than February of next year, ABF said.

Mr. Tonge is set to succeed

John Bason,

who has served as ABF’s finance director since 1999. Mr. Bason will become chairman of a new strategic advisory board and senior adviser to the Primark business, the company said.

Mr. Tonge has been CFO at Marks & Spencer since June 2020 and chief strategy officer since May. He is on a six-month notice period, Marks & Spencer said, adding that a search process for his successor is under way.

Eoin Tonge, chief financial and strategy officer at Marks & Spencer Group. He will assume the post of finance director at Associated British Foods next year.


Marks & Spencer Group PLC

ABF’s new advisory board is aimed at providing external expertise to Primark executives as they work to expand the chain’s stores in the U.S., particularly in East Coast markets such as Philadelphia and New York, and its digital operations, Mr. Bason said on Thursday. Primark had 403 stores as of May, most in the U.K. and Continental Europe.

“It is my responsibility to really bring together the people with expertise in each of these areas and then channel that so that the appropriate level of support is given to the Primark executive team,” Mr. Bason said. “Primark is a very big international business in a market which is fast changing and we believe all of that provides a great opportunity.”

In addition to its retail business, the company also operates sugar and bread factories, sells animal feed and owns subsidiaries such as George Weston Foods in Australia.

Mr. Bason said he had been thinking about succession planning for his role since late last year, which triggered the search for a successor.

“It’s passing on the baton in a hopefully considered way,” he said. He plans to stay on as finance director until the end of April 2023 to help with the transition.

Last month, ABF reported revenue of £4.05 billion for its third fiscal quarter ended May 28, equivalent to $4.84 billion, up 32% from the prior-year period, driven by price increases in response to higher raw-material and energy costs.

Primark’s revenue rose 81% to £1.73 billion compared with the prior-year period, ABF said. Retail represented 43% of ABF’s revenue for the quarter, up from about 31% a year earlier, a filing showed.

The company also said Primark is on track to deliver an adjusted operating profit margin of 10% for the full year, up from 7.4% in 2021.

“We expect for Primark overall to build its profit very strongly as the economy’s really come out of Covid,” Mr. Bason said.

ABF’s incoming finance director will likely focus on issues such as developing the Primark e-commerce offering and looking at ways to grow future cash returns, said

Richard Chamberlain,

a managing director at RBC Capital Markets LLC, an investment bank. The company has been slow to develop such an offer, which hurt it when the pandemic hit. Last month, ABF said it would begin a trial of a click-and-collect service in as many as 25 Primark stores with an initial offer of children’s clothing and products later this year.

The change in finance director is a smart move as ABF is now well into its recovery from the drubbing it took during the coronavirus pandemic, which resulted in store closures at Primark, according to an analysts’ note from Shore Capital Group Ltd. an investment firm.

“Tonge joins a high-quality business in ABF, with a distinctive shareholder structure, excellent values, a top-notch assortment of different businesses and a very strong balance sheet,” the analysts wrote.

Write to Mark Maurer at [email protected]

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