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Primark upbeat about sales prospects as it plans for English stores reopening on June 15

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Primark upbeat about sales prospects as it plans for English stores reopening on June 15

Primark stores in England are all expected to open on June 15, its parent company Associated British Foods (ABF) said today. The company was upbeat as it said trading in its already-opened shops in Europe and the US was encouraging and reassuring.

 

More than a third (34%) of Primark shops are already open – with 112 now operating in Europe and the US – and the retailer today said that by the time its English stores open, 79% of its store estate will be trading. One new UK shop, in Manchester’s Trafford Centre, will also open on June 15. Shops in Wales, Scotland and Northern Ireland are expected to open towards the end of this month.


In those stores, Primark is using social distancing, hand sanitiser, perspex screens at tills and extra cleaning to ensure customer and staff safety. Masks and gloves are available to all staff. “These measures are designed to safeguard the health and wellbeing of everyone in store and to instil confidence in the store environment,” said ABF in today’s announcement. “Feedback from customers and employees in those markets where the stores are open has been positive.” It said that trading in reopened shops was “both reassuring and encouraging” with customers queueing outside and then spending more once inside. So far only four stores, two in city centres, saw their initial sales fall below 50% of last year’s sales. This may not, however, represent a long-term pattern, said ABF.

 

It says the measures effectively put a cap on how many people are allowed into shops. In some stores that will make little difference, while in others the difference will be felt mostly at peak trading times – and that customers are likely to change their shopping behaviour to an extent. The biggest differences will be felt most sharply, it predicts, in its busiest stores, which represented between 10% and 20% of pre-Covid 19 Primark sales. ABF says stores are opening sooner than previously assumed, and that should mean cashflow from trading improves in the second half of the year. When all shops were closed the cost in lost sales came to £650m a month – that lasted for 12 days in total.

 

ABF says Primark will pay for and accept all products that were planned for handover from its suppliers by April 17, and has set up a fund to make sure that people who make some of its clothes in the most vulnerable markets are paid. When its stores started to reopen it had stock worth £1.5bn on hand and commitments to suppliers for £0.4bn of stock – well up from the usual stockholding of £0.9bn. Some stock will now be held over to next summer, and Primark is now placing new orders for autumn and winter clothing.

 

Image courtesy of Primark

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