Primark owner believes it lost out on sales of £1.1bn due to Covid-19
BOSSES AT the owner of fast fashion high street retailer Primark believe they will have lost out on sales of £1.1bn as a result of the increased Covid-19 restrictions and lockdowns of the past six months.
Associated British Foods (ABF) said it expects to take a further £480m hit to sales in the second half of its financial year – March to August – but expects a strong boost once stores can reopen and pent-up demand is met.
The company added that, despite the heavy falls, sales at Primark in the six months to February 27 are still expected to come in at £2.2bn, as some stores remain open overseas and taking into account sales periods before the new restrictions were introduced.
But this is well down on the £3.7bn in the same period a year earlier, prior to the global pandemic.
Just 77 stores are currently open – representing 22 per cent of total store selling space – primarily in the US.
Bosses said they expect to be “highly cash-generative” when stores can finally reopen, with 83 per cent of floor space able to welcome customers by April 26, based on current estimates and Government announcements in different countries.
ABF said it has saved money through cost-cutting measures to mitigate the falling sales and still has spring and summer stock from a year ago that could not be sold due to the pandemic, which will go into stores when they reopen. Later in the year, stores will also be able to rely on the autumn and winter collections from last year.
The company said: “We expect the period after reopening to be very cash-generative. We expect to sell the £150m of spring/ summer inventory held over from last year, and our cash outlay in the second half for the coming autumn/winter season will mostly benefit from the £260m autumn/winter stock held over from the first half.”
It added that, when stores were open, trading continued to be strong, with sales up 15 per cent on a like-for-like basis compared with last year.
We expect the period after reopening to be very cash-generative. Associated British Foods (ABF), owner of Primark