Primark braced for £1bn lockdown sales loss

Beauty and fashion maker Primark is bracing for a £1bn loss in sales as the Covid-19 lockdown causes more misery for retailers.

Some 305 Primark stores, representing 76% of the firm’s shopping destinations, have been forced to close due to the outbreak, and with no online shopping channel, Primark is no longer trading.

For the 16 weeks ended 2 January 2021, sales were 30% lower than last year, resulting in an estimated £540m loss, due to the varying restrictions across the UK and Europe.

While some of its stores were trading during the period, Primark reported a 14% downturn in like-for-like sales compared with 2020, with varied performance across its stores due to localised restrictions.

If stores remain closed past the end of the financial half year on 27 February, and do not reopen until the end of March, Primark is expecting to see a further £0.8bn in sales losses for the three month period.

Primark said all orders placed with suppliers will be honoured.

“The impact of store closures on Primark’s performance is significant,” the group said in a statement.

“We now expect full year sales and adjusted operating profit for Primark to be somewhat lower than last year.

“We will continue to expand retail selling space.”

Despite its e-commerce counterparts revealing robust sales throughout the pandemic, and in spite of outcries from its consumers, Primark is refusing to go online.

Earlier this week, ASOS reported a 23% uptick in sales across the UK, Europe and US markets for the four months ended 31 December 2020.

ASOS also garnered more than 23 million active consumers during the same period while restrictions were imposed for many parts of the UK and Europe.

But Primark said the operation costs and processing of returns would mean it could no longer offer competitive prices.