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Primark puts a figure on the cost of store lockdown closures

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Store-only retailer Primark today put a figure on the cost of Covid-19 lockdowns across its business. It says that while sales were down by 75% in its latest quarter, they were up in England and Wales compared to the same time last year in the week that non-essential stores reopened.

The clothing business, part of Associated British Foods, today showed sales fell by 75% in the third quarter of its financial year alone. That covers the dates from March 1 to June 20, which includes the full UK lockdown, from March 23 to June 15, as well as temporary store closures in other markets. Sales for the quarter came to £582m. Year-to-date figures, for the 40 weeks to June 20, were also sharply down. Sales of £4.3bn were down by 27% on the same time last year. Associated British Foods now expects Primark operating profit will be between £300m and £350, down from £913m in the last financial year. 

Primark had previously said that the closure of all of 375 of its shops would cost it £650m a month – and they did all close temporarily over the course of the 12 days to March 22. While they were closed, it cut its operating expenses by more than 50%, limiting its cash outflow to £100m a month. It also cancelled orders for goods that were due to be delivered after April 17 – but paid for previous orders, and has since placed new orders for goods worth more than £800m for the autumn/winter season and expects its full orders for the coming season to top £1bn. 

The retailer started to reopen its shops on May 4, in Austria, and says that since the beginning of June stores have reopened more quickly than expected, especially in Ireland. Some 179 shops reopened in four markets just on June 15. Social distancing measures within the shops have included screens at till, PPE for staff, hand sanitiser and extra cleaning. However, two stores in Leicester are now closed again, following a local lockdown in the city. Since those first stores reopened in May, sales for the seven weeks to June 20 have come to £322m, down by 12% on the same time last year, on a like-for-like basis that strips out the effect of store openings and closures. By the week to June 20, 90% of space had reopened, and sales came to £133m that week. Sales in England and Wales alone were ahead of the same week last year. The retailer is also opening a further five shops. 

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