You are here
Primark's sales bounce back after stores reopen
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."
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