// Primark stores shut in France, Italy, Spain and Austria due to the coronavirus outbreak
// The retailer expects to witness a drop in like-for-like sales in the UK
Primark has shut stores in France, Italy, Spain and Austria due to the coronavirus outbreak, and now expects to to take a hit on earnings.
The value fashion retailer said it also expects a fall in like-for-likes in the UK.
The four countries to witness the store closures account for 20 per cent of Primark’s selling space.
READ MORE: Primark owner issues supply warning from coronavirus amid sales growth
Despite reassuring its first-half adjusted operating profit will be ahead of expectations, the retailer said it might be too early to provide earnings guidance for the remainder of the current financial year “given the effect of Covid-19 on Primark’s sales”.
Parent company AB Foods had expected sales of £190 million from the affected European stores over the next four weeks.
The remainder of the estate, which includes the UK, represents 41 per cent of sales, and has seen like-for-like sales decline over the last two weeks.
These have accelerated over the past few days as a result of reduced footfall.
”We are managing the business appropriately, but do not expect to significantly mitigate the effect of the contribution lost from these sales,” AB Foods said.
“The group has a strong balance sheet, substantial cash liquidity with some £800 million of net cash at the half year, and significant undrawn bank facilities.”
AB Foods will publish its interim results on April 21.
Last month, AB Foods has warned there was a risk of supply shortages on some lines later in the year if factory delays in China caused by coronavirus are prolonged.
The company sources numerous items and products from China, but it said at the time that it is “well stocked with cover for several months” and does not expect any “short-term impact” as a result of the virus outbreak.
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