Primark sales slumped during Covid-19 lockdown
Primark owner Associated British Foods has estimated that the fashion retailer was losing £650 million in sales per month during the Covid-19 lockdown after all 375 of its stores closed in March.
As a result, Primark was forced to cancel orders from suppliers where the handover date was after 17 April and also reduced its operating expenses by over 50%.
In a trading update, ABF said Primark sales dropped by 75% to £582 million in its third quarter period to 20 June.
The retailer began a gradual reopening of its stores in Europe from 4 May, starting with Austria. With many stores opening quicker than expected, ABF said there were 179 stores trading by 15 June. This included Primark’s new shop at Manchester’s Trafford Centre. While all stores have Covid-19 hygiene and social distancing measures in place, ABF said customers have been able to freely move through stores to explore merchandise with little hindrance. By 2 July Primark had 367 stores open.
Following the reopening of the first stores on 4 May, cumulative sales for the seven weeks to 20 June were £322 million, which was 12% lower than last year on a like-for-like basis. Sales in the week ending 20 June amounted to £133 million and trading in England and Ireland was ahead of the same week last year.
ABF said there has been strong demand from customers for children’s, leisure and night wear, as well as shorts and t-shirts, since stores reopened. Most regional stores have been performing well but shops in city centres have been impacted by the absence of tourists and much lower commuter footfall.
Looking ahead, ABF said it now expects adjusted operating profit for Primark, excluding exceptional charges, will be in the range £300 million to £350 million for the full year compared to £913 million in the previous financial year.
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