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Primark, the fast fashion chain beloved of bargain-hunting teens and families on a budget, is being spun off from its parent company in a bid to return it to its glory days.

The high street giant started as one store in Dublin in 1969 and enjoyed explosive growth to become one of the best known retailers on the high street.

Lately, while sales have remained strong, it has faced pressure from online rivals such as Shien and Temu.

It is owned by Associated British Foods, which also owns Twinnings tea and Silver Spoon sugar among others.

ABF has long argued that having two such different businesses under the same roof made sense since a weakness in one part of the company would be covered up by success in the other.

On Tuesday, it bowed to pressure from investors to split the company in two.

ABF is controlled by the billionaire Weston family. George Weston will remain the chief executive of ABF after the split, while Eoin Tonge will be chief executive of Primark.

Mr Weston said: “This is an important step in the evolution of ABF. 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 as the only FTSE 100 pure play food producer.”

The rationale for the split was laid bare in half-year results which show profits down 9 per cent to £632m. Sales slipped a little to £9.5bn.

Chris Beckett, consumer staples analyst at Quilter Cheviot, said the decision had been “long expected” but “is not the value‑unlocking moment some might hope for”.

He said: “The separation will leave two FTSE 100 companies, both ultimately family‑owned via charitable trusts, which underlines that this is more about structure than strategy.

“Primark remains a large, low‑margin European retailer facing structural pressures, particularly in Germany, and this is not the sort of growth story that commands a meaningful re‑rating. A decade ago the separation might have landed differently, but today the retail backdrop is far less forgiving.”

Dan Coatsworth, head of markets at AJ Bell, said the calls for Primark to stand on its own intensified as the brand grew bigger.

He said: “ABF has finally buckled and pressed the button on the demerger. The type of investor who wants to own shares in a food products and ingredients business is not necessarily the same as one seeking exposure to the retail sector.”

ABF shares fell 83p to 1801p on the news. They are down 21 per cent over the last five years.

But the combined business is still worth towards £13bn, which means both Primark and the new ABF would make it into the FTSE 100 post the break-up.

Primark could be valued at £9bn on the stock market, with the food company at £4bn. Primark has 486 stores in 19 countries, a rare example of a UK retailer doing well overseas.

News of the break-up comes at a difficult time for both food and clothing companies. Rising costs of fuel and energy are likely to see consumers tightening their belts as inflation bites.

The management hope that a separate listing will make it easier for investors to give it a valuation closer to rivals such as Next. But they admit that the Iran war is hurting sales. “An encouraging start to spring/summer trading in March was followed by softer trading in April as we started to see the impact of the Middle East conflict on the consumer,” the company said in a statement to the stock market.

Wittington Investments, the Weston family’s holding vehicle, will have majority control of both companies.

Duncan Ferris at Freetrade said the uncoupling “might add some much-needed identity and strategic freedom to Primark” as it suffers from sluggish sales and is squeezed between mid-market brands like Next and H&M, and low-cost online retailers such as Vinted and Temu.