ABF expectss Primark sales and profit to be higher this financial year compared to last

ABF expectss Primark sales and profit to be higher this financial year compared to last

Value fashion retailer Primark expects to have lost GBP430m (US$578.6m) in sales during the recent lockdown across the UK – but says all orders placed with its suppliers have been honoured. 

In an update ahead of parent company Associated British Foods Plc's (ABF) annual general meeting today (4 December), chairman Michael McLintock said 34 stores remain temporarily closed across its markets, including all stores in Northern Ireland and Austria. This represents 7% of total retail selling space, compared to 62% when the highest number of stores were closed in November.

"Our estimate for the loss of sales for the announced periods of closure this autumn is now some GBP430m. The operating costs of the stores which were closed were reduced by some 25% during this period of closure," McLintock said. "In a small number of markets trading hours and store occupancy levels continue to be restricted and uncertainty about further temporary store closures in the short-term remains."

He added that sales since stores reopened have "once again been very strong, reflecting the excitement and appeal of the Primark offering."

The value fashion retailer is particularly hard hit by store closures as it does not operate a transactional website.

Looking ahead, McLintock said Primark sales and profit are still expected to be higher during the current financial year than last.

The retailer booked a 62% fall in annual profits for the year to 12 September, on the back of lost sales from store closures related to the pandemic. Earnings fell to GBP362m (US$470m) from GBP969m a year earlier, while revenues dropped 24% to GBP5.89bn.

The company also plans to accelerate its our US store opening programme. Taking into account new locations in Rome, Italy, and Barcelona and León in Spain, Primark now has 389 stores and 16.5m square feet of retail selling space.