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Coronavirus: Primark parent estimates £375m loss of sales

·2-min read
Primark's parent warned it will be taking “appropriate action” to reduce operating costs. Photo: AP Photo/Michael Sohn
Primark's parent warned it will be taking “appropriate action” to reduce operating costs. Photo: AP Photo/Michael Sohn

Associated British Foods (ABF.L), the owner of Primark, said it will be temporarily closing stores around Europe due to pandemic-related lockdown restrictions, a move which will lead to a loss of sales of £375m ($483m).

It said all Primark stores in the Republic of Ireland, France, Belgium, Wales, Catalonia in Spain and Slovenia are temporarily closed, which represents 19% of its total retail selling space.

It added that assuming a one-month lockdown in the UK is passed by parliament this week, 57% of its total selling space will be temporarily closed from 5 November.

READ MORE: UK retail sales rebound continues in August with fourth month of growth

“Our estimated loss of sales for these stores, including the stores in England, for the announced periods of closure is £375m,” the company said, adding that uncertainty about further temporary store closures in the short-term remains.

It also warned it will be taking “appropriate action” to reduce operating costs.

ABF five-day stock moves. Chart: Yahoo Finance
ABF five-day stock moves. Chart: Yahoo Finance

Its annual results for the year ended 12 September 2020 will be released 3 November.

ABF stock fell by more than 3% in early trade in London on Monday.

England is going into a second lockdown for one-month and the government will extend the furlough scheme to help protect jobs.

UK prime minister Boris Johnson, who was accompanied England's chief medical officer Professor Chris Whitty and the government's chief scientific adviser Sir Patrick Vallance, said at a press conference on Saturday, non-essential shops and hospitality will have to close, and travel will be under new restrictions, from Thursday and until 2 December. Schools and colleges will be allowed to stay open.

On Saturday, the total number of coronavirus cases since the pandemic began hit 1,011,660.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “Primark's owner ABF has rung up the cost of England's new lockdown and it's a very hefty bill, coming in £375 million.

“Investors have been rattled by extent to which the lockdown could hit the bottom line with shares down by more than 2%. The company may well regret its resistance to creating an online presence, as it can't make up the shortfall in digital sales.”

Watch: Why job losses have risen despite the economy reopening

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