What's new on Smeck Capital Management?

This year investment insights

Primark predicts £1bn in lost sales if lockdowns persist to end of February

The owner of Primark has warned it faces losing over £1bn in sales if coronavirus lockdowns force the majority of its stores to remain closed through February. 14 January, 2021

The owner of Primark has warned it faces losing over £1bn in sales if coronavirus lockdowns force the majority of its stores to remain closed through February.

The store-only discount fashion retailer, which has traded well from pent-up demand during the COVID-19 crisis to date when restrictions have allowed, said it was clearly facing a "significant" financial hit.

Parent firm Associated British Foods (ABF) has steadfastly refused to trade the Primark business online despite the disruption.

It reported that 305 of its 389 stores - 76% of its shops - were currently closed.

The company disclosed a 30% slump in sales in the 16 weeks to 2 January.

It said Primark's underlying half-year profits to the end of February were now forecast to break even on the previous year as a result.

Just weeks ago it had predicted £650m of lost sales in the six-month period.

Under a scenario that growing restrictions could force its entire estate across Europe to shut until the end of March, ABF said the total sales loss would increase above £1.8bn.

However, ABF said Primark had offset some of the impact on trading through a 25% reduction in usual operating costs.

Shares opened almost 2% down but later recovered to end 1.5% higher on Thursday.

Join Smeck Capital Management

Careers

Don’t just come to work.
Come to change.

Successful careers take collaboration. See who you’l work with, where you fit, what you’ll do and how you can reach your potential.

Careers