Primark takes 540 million pound sales hit from lockdowns
14 Jan 2021
Primark has taken a 540 million pound sales hit related to lockdowns, the fast-fashion retailer’s parent company Associated British Foods (AB Foods) announced Thursday.
The company said that number could reach 1.05 billion pounds if all of Primark's closed stores remain closed until 27 February 2021, the financial half-year.
For the 16 weeks to 2 January 2021, Primark sales were 30 percent lower than last year at constant currency and 28 percent lower at actual exchange rates.
But the company said that when certain stores were open during the period, trading was strong with sales at -14 percent on a like-for-like basis compared to pre-pandemic levels last year.
Primark expects 1 billion pound sales hit linked to lockdowns
Sales at Primark’s stores in retail parks were higher than a year ago, while shopping centres and regional high street stores were lower than last year.
Due to their heavy reliance on tourism and commuters, large destination city centre stores continued to see a significant decline in footfall.
The level of markdown was “substantially lower than the same period last year”. The company said it will warehouse some 200 million pounds worth of autumn/winter stock for later this year.
All orders placed with our suppliers will be honoured, it added.
As of today, 305 stores are closed, representing 76 percent of the company’s retail selling space.
Primark, unlike many of its rivals, only sells in physical stores, meaning it hasn’t been able to offset losses from the closure of its stores through online channels during the pandemic.
The high street retailer has previously said selling online isn't viable because it wouldn’t be able to keep its low price point with the added costs of deliveries and returns.
Photo credit: courtesy of Primark