Primark first half sales hit by lockdown closures
Primark owner Associated British Foods has said the fashion retailer’s first half sales are expected to come in £2.2 billion compared to £3.7 billion in the same period in the previous year.
The company said trading in the 24 weeks to 27 February was impacted by store closures during Covid-19 lockdowns and estimates the loss of sales while stores were closed to be some £1.1 billion. When stores were open, sales were down 15% on a like-for-like basis compared to the prior year as trading was hit by lower footfall and some restrictions on trading hours in countries such as Italy and Spain.
While like-for-like sales in shops in retail parks were higher than a year ago, sales in stores in shopping centres and regional high street stores were lower year-on-year. Excluding six major city centre stores, which were hit badly by a lack of tourists and commuters, like-for-like sales were down 11%. Primark is currently trading in 77 stores which represent 22% of its retail selling space.
ABF said Primark continued to perform well in the US, with particularly strong trading at new stores at American Dream in New Jersey and Sawgrass Mills in Florida.
The company now expects Primark’s first half adjusted operating profit to be marginally above break-even compared to £441 million for the same period in the last financial year.
ABF said: “We are looking forward to the reopening of the Primark estate. As of today, we have likely reopening dates for 233 stores in addition to the 77 stores already open, so that 83% of our retail selling space should be trading by 26 April. Our stores will be offering exciting seasonal ranges for spring/summer and we have been placing orders for merchandise with a long lead time for the autumn/winter season. We expect the period after reopening to be highly cash generative.”
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