Primark's sales bounce back after stores reopen
London
PRIMARK'S sales have bounced back more quickly than expected since stores reopened from lockdowns, a boon for a discount fashion retailer hit hard by the coronavirus crisis because of its lack of an online business.
The UK-based chain's comparable sales are down 12 per cent since its stores started to reopen in other markets on May 4, owner Associated British Foods Plc said on Thursday. Shoppers lined up outside Primark outlets in Britain when they reopened last month, mitigating the loss of business.
The shares rose as much as 8.4 per cent in early London trading. So far this year they're down 19 per cent.
Primark reopened stores faster than expected, with 367 now back in business and only eight still shut, AB Foods finance director John Bason said on a call.
"I think that outcome is going to pleasantly surprise some people," he said. "We are still opening new stores, too. We opened five this quarter and will open another five during the rest of the year, including two in the US."
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 still expects Primark's profit to slump by about two-thirds this year because of the shutdowns. The UK conglomerate said the discount chain should generate adjusted operating profit of as much as £350 million (S$610.2 million) in the current fiscal year, compared with £913 million last year.
Because Primark does not sell via e-commerce, it was hit harder hit than rivals by the lockdown, with revenue falling 75 per cent in the fiscal third quarter. The chain suffered a cash outflow of £800 million.
The conglomerate said sales at other divisions, including sugar, agriculture, grocery, and food ingredients, were offsetting some of the impact on its fashion business. BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Consumer & Healthcare
Sheng Siong Q1 net profit up 9.3% on higher revenue
Nestle sales growth sputters on US slump, vitamin snags
Hermes Q1 sales jump 17% on strong China demand
Cordlife’s independent auditor to retire after issuing disclaimer of opinion on FY2023 financials
Cutting the cord?: Events leading up to Cordlife’s MOH suspension and arrests of its directors, ex-group CEO
Cordlife customers push for legal action