Yahoo Finance Lockdown costs Primark £1.1bn in lost sales
Primark has once again increase the estimate of how much lockdown will cost it in lost sales.
Associated British Foods (ABF.L), which owns Primark, said on Thursday that lockdown was likely to cost the clothing chain £1.1bn ($1.56bn) in lost sales and profits would likely to be lower. Last month ABF had said a £1bn hit was likely.
Primark sales over the last six months are on track to hit £2.2bn, ABF said, which was down from £3.7bn in the same period last year. Closures mean the chain will have to store £260m of autumn and winter clothing in warehouses until they become seasonal again.
Primark has been hit particularly badly by lockdowns given the fact it has no online sales. There is a light at the end of the tunnel, though, and ABF said 83% of Primark stores will reopen by 26 April.
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"We expect the period after reopening to be highly cash generative," the company said.
"The re-closure of the Primark estate is costing a pretty penny, with lost revenues expected to cross the grim £1bn milestone," said Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown. "However, the retail chain is a force to be reckoned with. When previous lockdowns ended we saw demand rebounded strongly.
"Like-for-like sales were down 15% in the last round of reopening, which sounds bad on paper. In reality that’s an impressive recovery when you consider people had little reason to visit the high street, and Primark’s lack of online business."
ABF owns a sugar business, grocery brands, and an agriculture an ingredients business alongside Primark. The company said sales and profits at each of these businesses were likely to be ahead of forecasts.
Shares in ABF were flat in London.
