Cut-price apparel retailer Primark predicts that store closures during COVID-19 will cost it $1.4 billion
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- British fashion giant Primark's sales were down 30% year-on-year in the quarter, its parent company said.
- More than 75% of its stores are currently closed.
- Primark's total loss from store closures could reach £1.05 billion ($1.43 billion), it said.
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Store closures could cost British fast-fashion giant Primark £1.05 billion ($1.43 billion) in lost sales, parent company Associated British Foods (AB Foods) announced Thursday.
More than three in four of the retailer's 389 stores are currently closed, AB Foods said. This included all 190 stores in the UK, as well as all its sites in Germany, Ireland, the Netherlands, Portugal, and Austria. Its 11 stores in the US remain open.
Under current lockdown rules, all non-essential stores in England must remain closed until at least mid-February, Prime Minister Boris Johnson said last week. Other countries have implemented similar measures in response to surging COVID-19 cases.
If stores that are currently closed remain shut until February 27, the total lost sales caused by temporary closures during the pandemic could reach about £1.05 billion ($1.43 billion), AB Foods said.
In December, prior to England's new national lockdown being announced, it had estimated this figure at £650 million ($887 million).
Primark, which shuns online sales in favor of bricks-and-mortar stores, reported falling sales in the previous quarter.
In the 16 weeks to January 2, Primark's sales were down 30% year-on-year, AB Foods said. It attributed this to lockdown measures both in the UK and its international markets, ranging from restricted trading hours to compulsory store closures.
The company noted that when stores were open, "trading was strong given the circumstances," with a 14% drop in like-for-like sales compared to the same period the previous year.
But performance varied between stores, AB Foods said. Sales at its stores in retail parks were up year-on-year, while mall and large city-center stores fared worse because fewer commuters and tourists visited them, it said.
Primark isn't the only British apparel retailer struggling during the pandemic.
Topshop owner the Arcadia Group fell into administration in late November, putting more than 13,000 jobs at risk. Its CEO blamed compulsory store closures during the UK's national lockdowns.
The next day, British department store chain Debenhams said it would close all of its 124 stores as it enters liquidation, with 12,000 jobs at risk.
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