Primark posts sales increase but warns of coronavirus risk to supply chain
First half sales at Primark are expected to be 4.2% ahead of last year at constant currency and 2.5% ahead at actual exchange rates.
The fashion retailer’s owner, Associated British Foods, said the increase has been driven by a rise in retail selling space and level like-for-like sales.
The company expects Primark’s UK sales to be 3% ahead of last year following a strong contribution from new selling space which partially offset a 1.3% decline in like-for-like sales. ABF said trading was particularly strong throughout November and December but weakened in January and February.
Sales in Primark’s Eurozone are expected to be 5.3% ahead of last year at constant currency after the company achieved particularly strong sales growth in France, Belgium and Italy. Like-for-like sales for the Eurozone were 0.5% ahead of the same period last year.
ABF said it is closely monitoring developments in China regarding the coronavirus. In a statement, it said: “Primark sources a broad assortment of its product from China. We are working closely with our suppliers in China to assess the impact on their factories and supply chains and their ability to fulfil our current orders. If delays to factory production are prolonged, the risk of supply shortages on some lines later this financial year increases. We are assessing mitigating strategies, including a step up in production from existing suppliers in other regions.”
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