LONDON: Trading in British fashion chain Primark’s reopened stores has been encouraging, but the prolonged coronavirus lockdown means the retailer’s full-year profit is likely to slump by about two-thirds, owner Associated British Foods said.
All 375 Primark stores were shuttered in March as the pandemic spread. As governments eased lockdown restrictions the stores reopened, including all 153 stores in England on June 15.
AB Foods said on Thursday that since the reopening of the first Primark stores on May 4, cumulative sales for the seven weeks to June 20 were £322 million ($403 million) and were 12 percent lower than last year on a like-for-like basis.
It said sales in the week ended June 20, with more than 90 percent of selling space reopened, were £133 million, and trading in England and Ireland was ahead of the same week last year.
“We’re really getting back to business here. That number (down 12 percent) is much better than people were expecting,” AB Foods finance chief John Bason told Reuters.
However, the lockdown means Primark’s profit will be substantially down. The retailer has no online offer.
For the full 2019-20 year, Primark forecast adjusted operating profit in a range of £300-£350 million, down from the £913 million made in 2018-19.
Bason said that Primark has also placed more than £800 million of orders for the autumn/winter season and expects the total to exceed £1 billion.
AB Foods said that overall group revenue from continuing businesses for the 40 weeks to June 20 was 13 percent lower than the same period last year at constant currency.
For 2019-20 it expects “strong progress” in adjusted operating profit at its sugar, grocery, agriculture and ingredients businesses.
The grocery division, whose brands include Kingsmill bread, Twinings tea, Ovaltine and Jordans cereal, had a 9 percent increase in third-quarter revenue, with higher sales through retail channels more than offsetting weaker demand from foodservice businesses closed during the lockdown.
The group expects to end the year with net cash of more than £750 million.