Primark has sounded a warning it is expecting a GBP375m (US$437m) hit from lost sales following the UK Prime Minister’s decision to shutter all non-essential retail from Thursday.
Over the weekend, the UK government announced non-essential retail would be forced to close once again as the UK enters a month-long national lockdown from 5 November in a bid to curb the spread of coronavirus as cases continue to accelerate.
Associated British Foods, ABF, is among the first to declare an anticipated loss and said 57% of Primark’s store estate will be closed. The news comes ahead of the group’s financial announcement.
Primark operates out of 188 stores in the UK with no online business.
Currently, its stores in the Republic of Ireland, France, Belgium, Wales, Catalonia and Slovenia are temporarily shut. A number of stores in other countries are operating at reduced hours.
The retailer assured all orders placed with suppliers will be honoured though it will be taking appropriate action to cut operating costs.
In July, Primark promised to pay its suppliers in full for all outstanding finished goods and to utilise or pay for any finished fabric liabilities incurred before it closed all its stores in mid-March amid the Covid-19 pandemic. It had earlier been widely criticised for cancelling all orders with its suppliers when its stores closed due to nationwide lockdowns.