Primark owner warns coronavirus threatens clothing supplies
[LONDON] Primark owner Associated British Foods warned on Monday there was a risk of supply shortages on some lines later in the 2019-20 financial year if delays in factory production in China are prolonged due to coronavirus.
AB Foods, which sources a broad assortment of its product from China, said it typically builds inventories in advance of Chinese New Year and, as a consequence, is well stocked with cover for several months and does not expect any short-term impact.
"We are assessing mitigating strategies, including a step up in production from existing suppliers in other regions," it said on Monday.
The group also owns major sugar, grocery, ingredients and agriculture arms.
Several of its food businesses have operations in China. It said the China sugar campaign was completed in January before the coronavirus outbreak developed significantly.
The group said its AB Mauri, AB Agri and Ovaltine factories are operating, but at reduced capacity due to labour and logistics constraints.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
AB Foods forecast first-half sales and adjusted operating profit ahead of the previous year. Its outlook for the full-year is unchanged.
Primark's first-half sales were forecast to be up 4.2 per cent on a constant currency basis.
REUTERS
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Consumer & Healthcare
China bubble-tea chain Chabaidao plunges on Hong Kong debut
Japan’s 7-Eleven convenience chain targets aggressive global growth
Parental fury after stem cell bank ruins thousands of samples in Singapore
China’s bubble tea boom creates a half-dozen billionaires
US sues to block Coach owner’s US$8.5 billion buyout of Versace parent
Cutting the cord?: Events leading up to Cordlife’s MOH suspension and arrests of its directors, ex-group CEO