Primark predicts £1.5bn sales hit from lockdown store closures

Feb 25, 2021

The owner of Primark says it expects to lose £1.1bn in sales during the first half of its financial year through the coronavirus crisis-enforced closure of its stores – with more to follow.

Associated British Foods, which has steadfastly refused to trade the discount fashion chain online, told investors that group sales and adjusted operating profits would be lower than last year during the six months to 27 February.

The company said that restrictions aimed at controlling the spread of COVID-19 across the UK and Europe during the period had “materially impacted” Primark’s performance with sales of £2.2bn expected.

But ABF added that its other main interests, including sugar and ingredients, were all due to deliver sales and profits above expectations to mitigate some of the shortfall at Primark – a drop of 15% on a like for like basis compared to the same period in 2019/20.

It forecast that continuing disruption during the second half of the financial year to August could result in an additional £480m hit to Primark sales – taking the total during the 12-month period beyond £1.5bn.

However, the company said that it expected to witness a repeat of previous lockdown easing, which resulted in a surge in sales from pent-up demand.

It was expected that 83% of the total store estate would be back open by 26 April compared to a current total of 22%.

ABF based the prediction on current government guidelines which, subject to pandemic data, is expected to result in all 153 Primark stores in England reopening from 12 April.

The company’s 20 sites in Scotland were expected to follow on 26 April.

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