Primark owner looks to plug £430m sales black hole with extended festive opening hours
The figure is higher than previously expected though the company has recovered some of the costs, with overheads falling 25 per cent during the autumn lockdowns, and early signs that reopened stores are seeing strong sales.
Customers at Primark, which reopened its branches south of the Border on Wednesday, have been eager to buy clothes again and long queues have formed at some stores.
To maximise sales and spread out customer numbers, some sites have continued trading through the night, while others have extended opening hours, including at Fort Kinnaird Edinburgh where trading will extend to 10pm next week.
ABF said 34 stores remain temporarily closed, including all outlets in Northern Ireland and Austria, representing 7 per cent of Primark’s total retail selling space. This compares with 62 per cent when the highest number of stores were closed in November. Last month bosses had predicted sales would be hit by £375m.
Chairman Michael McLintock said: “Sales in the days since reopening in each of these markets have once again been very strong, reflecting the excitement and appeal of the Primark offering.
“We have extended the opening hours during this festive season in most of our stores in the Republic of Ireland and England to cater for the anticipated higher customer demand and to help ensure a safer environment by spreading shopping hours over a longer period.”
Susannah Streeter, senior investment and markets analyst at financial services group Hargreaves Lansdown, said: “The cost of the latest lockdown was the final nail to hammer ABF’s competitor Arcadia group, pushing it into administration.
“So it comes as little surprise that the Primark owner now says the forced shuttering of stores was an even bigger hit to sales than first forecast, now putting the price at £430m.
“Remarkably, despite this sizeable hole in revenues, ABF still expects profits to reach higher levels than last year. At a time when rivals on the high street like Top Shop, Debenhams and Bonmarche face being wound up or sold, Primark is proving highly resilient.”
She added: “It doesn’t have an e-commerce arm to offset store closures, instead it has a highly loyal customer base, who have waited until stores re-opened to satisfy their pent up shopping desires.”
McLintock’s comments, due to be made at the company’s annual shareholder meeting, also included an update on post-Brexit transition plans, saying preparations are complete.
He noted: “Following the UK’s exit from the EU, our businesses have completed all practical preparations for the end of the transition period this month and contingency plans are in place should our businesses experience some disruption at that time.”
Since the start of this financial year, new stores have been opened in the US – in New Jersey and Florida – with “encouraging” performance from its remaining sites.
Strong sales were also seen in the company’s first store in Rome in Italy, and a fifth site was opened in Barcelona, Spain.
ABF also owns a number of grocery brands, a sugar business and agriculture division.