3i shares surge as private equity group hails improvement at discount retailer Action

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Shares in UK private equity group 3i climbed 14 per cent on Thursday as it reported that sales at Action, the discount retailer which dominates its portfolio of investments, were recovering from an autumn slowdown.

3i said Action’s like-for-like sales had risen 6.1 per cent in the first four weeks of 2026 compared with the same period last year.

Netherlands-based Action has been emblematic of Europe’s booming low-cost retail market, which thrived as inflation rose after the pandemic and consumers overcame their resistance to discount shopping.

Investors had been concerned over the duration of an autumn slowdown suffered by the retailer in France, which accounts for about one-third of Action’s business.

The sluggish performance in the country dragged Action’s overall sales growth in 2025 to 4.9 per cent on a like-for-like basis, down from 10.3 per cent the previous year and below its guidance of 6.1 per cent.

3i said on Thursday that France was “the outlier” in Action’s business, hurt by consumer caution and competition from other stores.

Sales in the country rose 2.1 per cent in the opening weeks of 2026, it said, an improvement on the 1.3 per cent increase it reported for the whole of 2025.

It represented a pick-up in trading after “flat” sales growth in France in December compared with the same month a year earlier. Action’s sales in the country had decreased by mid-single digit percentages in October and November, 3i said.

“The positive news is that January started well,” said William Woods, retail analyst at Bernstein, in a note. “We think the fact that Action hasn’t got worse and has made sequential improvement should reflect well on the stock today.”

Partners at 3i have made fortunes from investing in Action, whose value has ballooned to account for four-fifths of the London-listed firm’s private equity portfolio and has become a proxy for the firm’s share price. 3i values Action at just over £35bn.

3i said Action’s net sales rose 16 per cent to €16bn last year while earnings before interest, tax, depreciation and amortisation rose 14 per cent to €2.4bn.

Action’s like-for-like sales growth outside France was 7.2 per cent for the whole of 2025, with 3i citing strong performance in the Netherlands, Poland, Austria and southern Europe.