Primark warns of £375m sales hit due to second lockdown
The owner of Primark has warned it will suffer a sales hit of £375m as it prepares to shutter stores across England due to new lockdown measures.
In a market update this morning, Associated British Foods (ABF) said 19 per cent of its selling space is currently closed due to Covid-19 restrictions in the Republic of Ireland, France, Belgium, Wales, Catalonia and Slovenia.
But the government’s plans to close all non-essential shops in England from one month this Thursday means the retailer faces temporary closure of 57 per cent of its selling space.
Primark said its trading hours were restricted in a number of other markets, while there was still uncertainty about further temporary store closures in the short term.
The budget fashion chain said it was working to mitigate the closures and would take “appropriate action” to reduce operating costs. The company said it will honour all orders placed with its suppliers.
The fresh restrictions will deal a heavy blow to Primark, which had reported a rebound in sales in the fourth quarter after the first lockdown lifted.
ABF, which is also the world’s second-largest producer of sugar, said it had a strong cash position and further debt facilities, giving it group liquidity of £3.1bn.
The company will publish its full-year results as planned tomorrow.