Yahoo Finance Coronavirus: Primark owner warns 'we have sold nothing' since shutdown
Primark owner Associated British Foods (ABF.L) said on Tuesday 21 April that it had scrapped its dividend, furloughed 68,000 employees across Europe, and suspended its earnings guidance due to the coronavirus crisis.
The fast-fashion retailing giant, which does not operate an online store, said that it had gone from making £650m ($806) in sales each month to selling “nothing” since it closed the last of its stores on 22 March.
“ABF has been squarely in the path of this pandemic,” said chief executive George Weston on Tuesday. “One of the world's great clothing retailers is entirely shut.”
Weston said that 68,000 Primark employees were receiving furlough payments from governments across Europe, most of whom it would otherwise have been forced to make redundant.
Read more: European stocks fall as Trump claims he will suspend US immigration
He said that Primark had taken delivery of — and paid for — “very large amounts of completed stock which we can’t sell for now,” and said that the retailer had established a fund to ensure supply chain workers in vulnerable countries would be paid for their work.
“But not until shops reopen and we can place new orders will the economic hardship that COVID-19 has caused to all those in our supply chain begin to reduce,” he warned.
The company said that its food businesses “have equally been put under intense pressure since this pandemic began.”
Associated British Foods said that it was “too early” to provide earnings guidance for the rest of the year.
The company said its board had chosen not to declare a shareholder dividend, noting that the group was instead focused on managing cash outflows in the second half of its financial year.
Read more: 140,000 firms have applied for UK government furlough scheme
Pre-tax profits in the six months to 29 February fell by 42% to £298m, even as revenue climbed 2% to £7.6bn, largely due to a £284m charge related to an expected decline in value of its clothing inventory once stores open.
"The group delivered an encouraging trading performance in the first half. The rapid spread of COVID-19 has impacted all of our lives and the human tragedy that continues to unfold has shocked and saddened us all,” said Weston.
The company confirmed that two of its employees had died from coronavirus in the past three weeks, and said that a third remained in intensive care in the US.
