The coronavirus has caused an unprecedented turnover drop at fashion discounter Primark. As the chain has no webshop and all physical stores are closed, its monthly sales have dropped to literally zero euros.
Battlefield
Owner AB Foods reports that Primark’s monthly turnover has dropped from 650 million pounds (750 million euros) to precisely zero, during the presentation of the company’s half-year results (September 2019 – February 2020). As the chain’s stores are closed throughout the world, 68,000 employees are temporarily unemployed and physical sales have stopped.
Moreover, the date and circumstances of the eventual reopening also still remain uncertain. “When we are allowed to reopen we must make our Primark stores safe for our staff and our customers, even if that means ensuring there are fewer people shopping at any one time and so accepting lower sales at least until the remaining risk is minimal”, RetailGazette quoted CEO George Weston.
Slight profit drop
Primark has also announced an extra payment of 370 million pounds (420 million euros) to suppliers for orders that are in production or yet to be delivered, after a public outcry when the company decided to cancel a big number of orders. Another expensive measure is the decision to allocate a provision of 284 million pounds (325 million euros) for unsold stock.
In the six ‘pre-corona’ months (the half-year up to and including February), Primark realised a turnover of 3.71 billion pounds (4.2 billion euros), 2.2% more than the same period a year earlier. The increase came courtesy of an rise in store area, as like-for-like sales went down 0.5 %. AEBITDA went down from 451 million pounds to 441 million pounds (500 million euros).
