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Primark takes 1.1 billion pound sales hit from closed stores

By Huw Hughes

25 Feb 2021

Business

Primark has taken a 1.1 billion pound sales hit related to lockdowns for the first half of the year, the fast-fashion retailer’s parent company Associated British Foods (AB Foods) announced Thursday.

AB Foods said Primark’s performance in the 24 weeks to February 27 was “materially impacted” by lockdown restrictions across the UK and Europe, but said “demand was strong and trading was encouraging” when stores were temporarily open during the period, “given the circumstances”.

Primark expects to report a 40.5 percent year-on-year drop in sales for the first half to 2.2 billion pounds and for adjusted operating profit to be “marginally above break-even” compared to the 441 million pounds it reported last year.

Store reopening plans

Unsurprisingly, the company said it is “looking forward to the reopening of the Primark estate”. Currently, the company has “likely reopening dates” for 233 stores in addition to the 77 stores already open, so that 83 percent of its retail selling space should be trading by April 26.

“We expect the period after reopening to be highly cash generative,” the company said.

Primark, which doesn’t sell online, has been hit particularly hard this year by Covid-19 store closures as it hasn’t been able to offset losses through online channels like many of its rivals have.

Prime minister Boris Johnson announced Monday that non-essential stores in England will be permitted to reopen from April 12, while on Tuesday, first minister Nicola Sturgeon said stores in Scotland will be able to reopen from April 26.

Image: Primark