Primark warns of further 220 million pound sales hit from store closures

Primark’s parent company Associated British Foods (ABF) has warned of a further 220 million pounds it expects to lose from store closures as the UK increases its restrictions amid a new spike of Covid-19 cases.

ABF said it now expects to lose 650 million pounds in sales in the year to September, up from the 430 million pounds it announced on 4 December.

Primark, which doesn’t sell online, has been hit particularly hard this year by Covid-19 store closures as it hasn't been able to offset losses through online channels like many of its rivals have.

Across its markets, 34 stores remain temporarily closed, including all stores in Northern Ireland and Austria. It represents 7 percent of the fast-fashion company’s total retail selling space compared to 62 percent when the highest number of stores were closed in November.

Primark expects further losses amid tighter UK restrictions

Stores in Primarks major markets of the Republic of Ireland, England, France and Belgium reopened in the last week.

ABF said sales in the days since reopening in each of these markets have been “very strong, reflecting the excitement and appeal of the Primark offering”.

It comes as more non-essential stores across the UK were forced to close last week as a swathe of new regions entered into Tier 4, the strictest level of lockdown restrictions.

From 31 December 2020, areas placed in Tier 4 included Leicester City, Leicestershire, Birmingham and Black Country, Greater Manchester, and Swindon.

It means around 75 percent of the population is now under Tier 4 “stay home” restrictions.

It comes as a spike in cases is seen up and down the country. Between 18 and 24 December, the weekly case rate in England rose to 402.6 per 100,000, a 32 percent increase on the previous week.

Photo credit: Primark