Primark estimates that non-essential retail closures across its global store estate cost the business £1.1bn in lost sales in the first half of its financial year, but expects the period after lockdown ends to be “highly cash generative”.
The fashion retailer said sales in the 24 weeks to February 27 were expected to be around £2.2bn, down from £3.7bn during the same period the previous financial year and that adjusted operating profit would be “marginally above break-even”.
Primark, which does not sell online, attributed this 41% forecasted decline in interim sales to store closures across its global estate due to coronavirus lockdowns.
The retailer’s sales were down 15% in like-for-like terms during the period and Primark said trading was “strong” when stores were able to open.
Primarks estimates that “the loss of sales in the periods of store closures during this period is £1.1bn”.
As of today, 77 stores representing 22% of Primark’s selling space are open and its US stores “continued to perform well”.
Current plans to ease lockdown measures in the UK and Europe mean that 83% of Primark’s trading space, equating to 233 of its stores should be open by April 26. The retailer said it expects “the period after reopening to be highly cash generative”.
Sales in the retailer’s recently reopened stores in Austria, Poland and Slovenia are ahead of the previous year in like-for-like terms.
Primark plans to open 15 new stores during its current financial year including five in Spain and three in the US.
The retailer expects to sell £150m worth of spring and summer inventory held over from the previous year when stores reopen, as well as £260m worth of leftover autumn and winter stock later in the year.