Shares in Associated British Foods (ABF) rallied strongly on better-than-expected full-year results (9 Nov) and news the foods-to-fashion conglomerate will pay a 13.8p special dividend and seek to buy back shares under a new capital allocation framework.

Yet the real excitement surrounded the upbeat outlook for discount clothing chain Primark, which appears to have smartened up its stores during lockdown downtime and is stepping up its digital presence.

Primark is accelerating its selling space expansion across the US, where management insists ‘the potential for new stores is considerable’, as well as France, Italy and Spain. Over the next five years, Primark’s store estate is expected to grow from a year-end total of 398 to 530 outlets.

Given rising awareness around fast fashion’s damaging environmental impact, Primark has unveiled a far-reaching sustainability strategy, in common with ASOS (ASC:AIM) and Boohoo (BOO:AIM).

Another significant aspect of Primark’s evolution is that the budget fashion chain is rolling out a broader range of products which is helping to diversify the sales mix away from t-shirts, underwear and dresses.

Cookware, ceramics, rugs and outdoor items like boots and waterproof jackets increasingly feature in its stores, which is serving to widen the appeal of Primark as a brand.

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