Primark has misplaced out on £2bn of gross sales and £650m of revenue because of the coronavirus pandemic, contributing to a dive in annual income for the retailer’s mum or dad group.
Associated British Foods (ABF), which additionally owns Twinings teas, Kingsmill bread and Dorset Cereals, stated gross sales at Primark dropped 24% to £5.9bn and income slumped 62% to £362m after the chain, which doesn’t promote on-line, was compelled to shut for 3 months throughout lockdowns all over the world. Primark’s income had been anticipated to high £1bn this yr.
The retailer stated on Monday it anticipated to lose £375m in gross sales through the subsequent lockdown, with 57% of its retailers closed briefly from Thursday.
The issues at Primark helped push ABF’s income down 42% to £686m within the yr to 12 September, with revenues 12% decrease at £13.9bn regardless of a robust efficiency from its grocery and sugar processing companies.
George Weston, the chief govt of ABF, stated Primark had delivered a “strong efficiency, receiving an overwhelmingly constructive response when it safely welcomed clients again to its shops”.
The corporate stated it had been capable of unload its summer season inventory with minimal reductions as customers queued to enter shops. It took £98m in furlough funds for workers at closed shops throughout lockdown whereas different employees took pay cuts, serving to to cut back overheads by half.
Gross sales of youngsters’s clothes, leisurewear and pyjamas rose above pre-Covid ranges as soon as shops reopened, however gross sales of males’s fits and baggage had been down, reflecting working from house and restricted journey.
Primark’s metropolis centre shops reported a “vital decline” in customer numbers, however these in procuring centres and regional excessive streets welcomed the same variety of customers to final yr as soon as they had been allowed to reopen.
Weston stated ABF had the money sources to see it by means of the following lockdown. It has cancelled its remaining dividend however stated it anticipated Primark’s gross sales and income to extend within the yr forward regardless of the prospect of a tricky Christmas.