(qlmbusinessnews.com via news.sky.com– Fri, 15th Jan 2021) London, Uk – –
The owner of Primark has warned it faces losing over £1bn in sales if coronavirus lockdowns force the majority of its stores to remain closed through February.
The store-only discount fashion retailer, which has traded well from pent-up demand during the COVID-19 crisis to date when restrictions have allowed, said it was clearly facing a “significant” financial hit.
Parent firm Associated British Foods (ABF) has steadfastly refused to trade the Primark business online despite the disruption.
It reported that 305 of its 389 stores – 76% of its shops – were currently closed.
The company disclosed a 30% slump in sales in the 16 weeks to 2 January.
It said Primark's underlying half-year profits to the end of February were now forecast to break even on the previous year as a result.
Just weeks ago it had predicted £650m of lost sales in the six-month period.
Under a scenario that growing restrictions could force its entire estate across Europe to shut until the end of March, ABF said the total sales loss would increase above £1.8bn.
However, ABF said Primark had offset some of the impact on trading through a 25% reduction in usual operating costs.
Shares opened almost 2% down but later recovered to end 1.5% higher on Thursday.
By James Sillars