Primark owner to face £650 million sales loss after more stores close
31 December 2020, 14:04
Earlier this month Primark had said it expected to face a £430 million impact due to the pandemic.
Primark owner Associated British Foods (ABF) has said it will face a £650 million hit from Covid-19 after tougher restrictions in the UK and Ireland forced more stores to close.
It represents a more-than 50% increase from the £430 million impact it warned investors about earlier this month.
ABF said it will lose more money than previously predicted after rafts of UK stores shut their doors on Thursday in line with changes to regional tiers across the country.
On Wednesday, the Government said a number of regions would move into its harshest Tier 4 restrictions, which include the closure of non-essential retail stores.
The group said that 253 Primark stores will be temporarily closed, as of January 1.
It said the closures represent 64% of the retailer’s total selling space.
Prior to Christmas, Primark opened some of its stores in Tier 3 and Tier 2 areas throughout the night to maximise sales and spread out customer numbers.
Earlier this month, the budget fashion brand said it had recovered some of the costs, with overheads falling 25% during the autumn lockdowns, with early signs showing that reopened stores were seeing strong sales in December.
Shares in the company dropped 1.6% lower to 2,264p after it provided the update to shareholders.
