// Primark sales plunge 75% to £582 million in third quarter ending June 20
// However, it was “encouraged” by trade vast majority of its shops have exited lockdown
// The post-lockdown demand prompts Primark to place £1bn worth of orders for the autumn & winter season
Primark owner Associated British Foods (AB Foods) has said sales at the high street retailer have been “encouraging” after reopening sites, despite predicting a major hit to profits.
AB Foods said its value fashion chain has been boosted by strong sales of children’s clothes and leisurewear, but sales for the past quarter plummeted 75 per cent to £582 million as a result of the coronavirus lockdown.
The company said total sales across its divisions had fallen by 39 per cent to £2.6 billion for the third quarter ending June 20, compared with the same period last year.
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AB Foods said significantly lower sales at Primark, which has no online operations, were partly offset by growth in its FMCG and ingredients arms.
AB Foods said only eight of its 375 Primark stores around the world have not yet reopened, while it has reported “reassuring and encouraging” trade from stores which have welcomed customers again.
Customer demand has also been strong for summer clothing such as shorts and t-shirts, while sales of formal menswear and travel-related accessories have been “unsurprisingly weak”, it said.
The post-lockdown demand also prompted Primark to place £1 billion worth of orders for the autumn and winter season.
“Most of our regional stores are performing well, especially in retail parks,” AB Foods said in its trading update.
“Our stores in the centre of big cities are suffering from the current absence of tourism and much lower commuter footfall.”
It said sales in the first week of reopening in England and Wales were “ahead of the same week last year” after raking in £133 million from customers.
However, AB Foods warned that the Covid-19 crisis could knock more than £600 million off Primark’s operating profit for the year.
Despite this, it said it is expects “strong progress” in adjusted operating profits for its grocery, ingredients, agriculture and sugar arms.
AB Foods said its third-quarter grocery revenues were nine per cent ahead of last year, due to higher volumes as customers bought more store-cupboard products.
with PA Wires
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